President Donald Trump ordered the Treasury to stop building new pennies, reviving old debates about the value of a cent coin.
Trump argued that Penny, who he claimed in his February 9 post about his true social platform, was “wasteful” as it went far beyond the currency value.
“Let’s tear waste from the budgets of our great nation, even if it’s a penny at once,” he wrote.
Why is there a push to retire a coin?
According to US Mint, it’s only worth one cent, but each penny costs nearly four cents to produce. This is due to the cost of the raw materials (mainly zinc) and the molding process.
With approximately 3.2 billion pennies being built in 2024, the production cost is $12.8 billion.
Over the centuries, inflation created pennies, first created in 1793, effectively becoming obsolete. It’s not very important, so it’s no longer practical for the cheapest retail items, like single gumballs and candy.
“People don’t want them,” Larry Jackson, a 65-year-old coin dealer in Atlanta, told Reuters. “They smoke socks in cans, drawers and jars. A 30-pound bag. Even that won’t win $50.”
Additionally, penny use tends to clog retail transactions. According to a 2006 survey by the Convenience Store Association, if cashiers can count pennies, they can save 2.5 seconds per checkout.
Is there any discussion to keep it?
yes. Some penny supporters argue that the currency helps keep prices down.
They argue that businesses are more likely to close prices upwards than downwards without penny. It can affect minor inflation.
Furthermore, they argue that Penny serves as a valuable source of funding for charities. Each individual contribution may be small, but it all increases.
Others point out that discarding coins could cause the government to drive out more nickel and force even greater economic burdens. This nickel worth five cents is expensive to produce at 13 cents.
But in the end, most economists say losing a penny will have a negligible impact on consumers. This is because most of the transactions are already cashless.
“At some point in history, cancelling penny was a bigger deal, but now people aren’t even putting it in their pocket,” economist Sean Sneace said. “They are hardly in circulation.”
Did other countries try to dispose of pennies?
Yes, countries like Canada, New Zealand, Australia and the Netherlands are all phased out the smallest sect coins.
According to the Canadian government, when Canada stopped minting penny in 2013, it saved an estimated $11 million a year. Many retailers began rolling their cash purchases to the nearest 5 cent mark, but the government collected and recycled pennies for their copper and zinc content.
US lawmakers have long advocated for similar measures. Since 1989, late Arizona Rep. Jim Kolbe began a decades-long bid to eliminate Penny and introduced several failed bills to discard it. “Penny has been a nuisance for years,” he said in 2006.
Is it legal for Trump to stop production of penny himself?
That’s unknown.
Congress, which oversees the US Mint operation, will need to pass laws to retire the coin forever. However, some legal experts say Trump can simply direct the Treasury Secretary to stop producing them.
Lawrence H., a legal scholar, pointed out that secretaries have the authority to make coins with what they deem necessary.
“Unlike many things (President Trump’s) administration has been following the flood of executive orders since January 20th, this action seems completely legal and completely constitutional to me,” the tribe said. said.
“The process of canceling penny in the US is a bit unclear,” says Robert Triest, an economist professor at Northeastern University.
“It’s likely that Congressional actions will be required, but the Treasury Secretary may simply be able to stop building new pennies,” Triest said in a January news article. He added that putting out pennies in stages will raise questions about how to close cash transactions and how people use existing penny collections.