Ditching the "penny"

But the mint doesn't keep the value difference between the cost of the coins they make and the value of the coins.
And if you add in machinery, workers salaries and other expenses,
I doubt they are making a "profit".

 

Log in or Sign up to hide this ad.

Didn’t mean to come across as implying the mint is a private entity that keeps the profit it makes. The U.S. Mint falls under the Department of Treasury, which is where profits would go.

Also, the production costs include all machinery, worker salaries, and other expenses. If this is news to you, feel free to research the term “production costs.”

 

classy

 

Fair point. Your trolling and needless introduction of politics soured this thread for me.

@Michael K apologies for the rude post. You have incorrect information and I could have been more polite in explaining the correct information.

 

I didn't find anything rude in any posts.
I understand production costs I just wanted to include that, as it is not
just the cost/ value of the coins.
And the Treasury Dept. ALSO doesn't keep any profit between the difference
in the cost of making the coins and the value of the coins. If there is a "profit"
it's not going into anyones pocket. The coins are for consumers to use.
If they make 1 million dollars worth of coins and it "costs" them (us) half a million dollars, there is no physical profit of half a million dollars that can be banked anywhere. There is no way to extract that "profit" out of the system.

 

I’m glad you didn’t find it rude. Certainly not my intent. I have concerns that you don’t actually understand the subject fully, but you’re speaking on it as if from an absolutely clear position. The U.S. Mint can ABSOLUTELY make a profit.

If you look at the reports from the mint, they reported millions in profit from 2022-2024. Source:
https://www.usmint.gov/content/dam/usmint/reports/2024-annual-report.pdf

To help you understand, the profit (seniorage) comes when the US Mint delivers coins at a face value for less than what it cost them to produce and deliver. Example: if a quarter costs 15 cents to make, and 3 cents to deliver, when the Mint delivers the quarters to a bank, the bank pays 25 cents per quarter, meaning there’s a 7 cent profit (seniorage) per quarter.

Another way to make profit is to sell gold and silver coins well above melt value. Every time someone buys a gold coin, there’s a profit made. The profits add up.

Where does the profit go? Back to the Treasury. From there, the money goes wherever Congress tells it to. https://home.treasury.gov/subfooter/faqs/duties-and-functions-faqs

 

Whoa! The dime? Let's not be brash, now! lol

 

Wouldn't help. The overhead (cost of manufacturing) is over 2 cents not including the cost of materials. Even if whatever you made them out of was given to the mint for free, they would still be making them at a loss. Aluminim isn't a very good choice either. The aluminum oxide coating on the planchets is hard on the dies resulting in reduced die life, and when run through high speed counting/handing machines they have a tendency to cold weld themselves together.

True, but if they stopped making the cent they'd make $80+ million dollars more.

The seigniorage profits are transferred via a book keeping entry into the Treasury General Fund from which it can be spent like any other money. The mint doesn't transfer all of it though, part of it is retained and used for the operating funds of the Mint. This is why the Mint does not receive any appropriations (tax money) from the Congress. They are self funding.

 

Thank you for speaking more accurately on the subject. I agree that ending the penny will save money. The question is what’s the purpose of the penny (change for goods and taxes) and who is affected by it? As long as we have those discussions, I see no need to hold onto the cent.

 

I agree about not needing the penny anymore. Maybe save enough so we can all get all get a Stimulus check.....

 

I'm waiting to get an email about getting fired from retirement!

 

Multiples of 10 wouldn't bother me. "10" is a magic number. Like the metric system.

South Korea did it in the early 1980s when the government there no longer gave nor received currency in units less than 10-Won increments. This was an effort to get rid of their Five-Won and One-Won coins. Their government also no longer figured taxes or utilities in unit increments below 10-Won. This mattered because at that time, Koreans commonly paid these bills in cash at their local banks. They didn't stop people from using the One-Won or Five-Won, or even remove them from circulation. Just the action of the government no longer figuring taxes and utilities below 10-Won seemed to have done the trick: Apparently, merchants followed suit voluntarily and those coins rapidly disappeared from circulation.

They still make those two lower-value coins, but only for mint sets/gift sets.

The best part of getting rid of the cent coins is that my Lincoln Cent collection will become worth a million dollars overnight.

I'm stoked.

 

I did just receive my email from the mint about the 2025 proof set and they are showing it with the cent.

 

Considering the effects on worldwide financial disruption from the current tariff wars, the penny’s demise is like a ripple in the ocean

 

Could be that the penny goes away except for mint sets. Kind of like the half dollar.

 

Pennies had already been minted this year before the order went out to stop minting them; it's just that they won't be minted anymore. (Whether this includes proof and uncirculated sets as of next year, I guess we'll see).

 

If I remember History correctly, our money originally was intended to hold a metal value as well was it not? Copper, Brass, Bronze, Nickel, Silver, Gold... all hold their own value, therefore even if melted, they were still worth their weight. Paper money used to be backed by, and exchanged for, Gold & Silver... Now, just for goods, services, and taxes.

I see a fairly simple solution to this upcoming lack of "Cents". Just as we are seeing now, it's sometimes a good thing to re-evaluate and reflect on what has worked more efficiently in the past, a get back to basics approach if you will.

I would simply propose a Copper/Nickle or Bronze, Alloy mix, minted in 2 Cent & 3 Cent denominations and eliminating the 1 Cent & 5 cent Nickel entirely. Or just do a 2-1/2 Cent coin. This also keeps the math closer to correct for us simpletons.

I'm sure there are ways to streamline the minting processes as well, from the Mines to the Refineries and the Mint's. We have plenty of copper, and nickel, it just needs to be dug up or remelted from old coins. It's all just basic supply and demand. But the cost of fuel is the largest contributing factor to the cost of everything nowadays.

 

How much math are you willing to do for two or three cents? I think for most people today the answer is "none at all".

 

And that astounds me still. I know how hard I work for a little cash and I find more loose change these days in parking lots. I hit the lottery at the car wash Saturday. Almost sixty cents picked up.

 

I suppose... Unless you count the aluminum cans everyone saves up in their redneck retirement funds. That's a nickel each here in Cali. that we pay in advance when we buy anything in an aluminum can... or plastic for that matter. That actual nickel is a refund. If you save a few thousand cans, it pays fuel cost for the trip to the recyclers.

Getting rid of cents and nickels will cost us no more than 4 cents per transaction once things are rounded up, this will always favor the recipient, not the consumer... so our dollar, in theory, loses 4% more of its value.

We can always go cashless, which will work great as long as the power and innerweb are on!