JUST SAW THIS IN MY NEWS FEED. https://gizmodo.com/it-costs-seven-cents-to-make-a-nickel-so-the-u-s-mint-1827135366 (a link from a publication Im unfamiliar with says it takes 7 cents to make a nickel, SO, they designed a cheaper one) I'm not sure if this is legit or if it's some kind of hoax or false news. Anyone know anything about this?
That's a standard design used for testing new materials and processes. Others will be able to fill in details; I know I've seen it here before.
Ok thanks ... I tried to make sure if it'd not been done here before by entering "new nickel" into search box before the post... So I'll check out the discussion there if I can find it. I personally don't like the cheapening of our coinage, but it's been occurring more and more as the scarcer, harder to mine metals rise in price.
When you factor in other expenses besides just the metal costs (salaries, machine maintenance, utilities, etc.) It's always going to cost more to mint a coin than what it is worth. However, a nickel isn't used once. It's used thousands of times or more in it's life. That number isn't factored in either, and if you do, this: "It costs 7 cents to make a nickel." Is drivel. Yes it is still worth .05 cents, and yes it cost .07 cents to produce. But over the course of it's life, it has clearly been worth more than .07 cents, and, it still can be redeemed at the end for .05 cents. So for a cost of 2 cents you are using this nickel thousands of times. The government is in debt to trillions of dollars. You aren't going to get any of that back trying to save .02 cents on a nickel. In fact, once you start paying for new designs, and testing new metals, etc. even if you bring the cost in at .03 or .04 cents per, you're not really saving anything in the long run except some meaningless numbers on a ledger sheet.
If you make one and a half billion nickels, and reduce the cost of each one by 2 cents, the savings is “meaningless”?
The government that produces the nickels doesn't see any value back from making them. It's just an expense. Sure if you think you are saving money on paper by cutting the cost of something which is over produced and unnecessary. Why not just make 1/2 billion nickels instead of 1.5 billion and then you are saving 7 cents x 1 billion instead of 2 cents on 1.5 billion with an inferior zinc nickel (or whatever junk they are going to use to cut cost)? And yes compared to the trillions that they will never be able to pay back some imaginary millions that are saved on a balance sheet but not in real life is meaningless. Why is it meaningless? Because we don't have the money to pay for it in the first place. You aren't saving money when you don't pay your debts and keep spending money. Even if spending that money is making nickels.
Well demonstrated point with excellent pedagogical technique. A+, and well worth us American citizens understanding.
This is from another thread, but if you look at the numbers, the positive difference in the dimes and quarters prob makes up for the 2 cent nickel deficit. ( And cents.)
It sure does. They're willing to keep the taxpayers happy and lose money on Cents and Nickels and make hundreds of millions of dollars on dimes and quarters.
But using it over and over again by people has no bearing on the cost of production. Even if somehow it came back to the government and they reused it you would then have to include the handling cost and the loss would only increase.
The point is that the one time 2 cent loss is recovered by the fact this coin is used and reused thousands of times and the "value" if spread over all those transactions becomes fractionally infinitesimal. The cost of production isn't accurately measured anyway as it is just metal content versus face value. If you were to add in employee salaries, cost of machinery and upkeep, utilities, insurance, rent, etc. the real cost in producing a coin is much higher than reported.
That's not true at all. The metal value of new cents and nickels is well under their face value. The reported production costs do include those other factors.
That's good to know. So it won't matter if they change the metals or not, as production costs will always rise, and changing the metal in the coin is only a brief temporary savings. In the long run it won't save anything. Although I've never seen any spreadsheet or accounting that lists these other production costs/expenses and tells us in dollars what they are spending. Since they are making a profit on the quarters and dimes, they probably should be able to make a profit or break even on the nickels. Although, it is a lower face value. Since it's not the metal cost that is putting them in the red.
The Mint uses to catch all categories, Administrative and General. If it doesn't fit in the items they list, it goes in one of these areas. Take your pick. It's all the same, a cost factor. And no one cares so round and round we go.
That would only be true if it was the mint using the coin each of those thousands of times. If a manufacturer makes a product at a loss, the fact that that product gets used many times will not change the fact that the manufacturer suffered a loss making it.
The cost of production of the nickel coin is covered by seigniorage of other coinage. Dollar coin would be very profitable but due to the demand of the coin, I believe the quarter makes the bulk of it.
One might almost think that, when the purchasing power of your change has decreased twentyfold, it would make sense to stop fiddling with those increasingly trivial small coins. Naah, that's crazy talk.
As I see it, the biggest benefit to doing away with is you'll have more room in your pockets for nickels that cost more than face value to mint.
That is true, but the mint would make a much larger profit on the seigniorage and be able to turn more over to the general fund if they weren't using it to offset the losses on the cent and five cent. Also true, when they stopped making the president and NA dollars for circulation the mints seigniorage profits turned over to the general fund dropped by around $400 million. The mint almost went into the red that first year.
