A Penny For Your Thoughts? Not For Much Longer!

Pennies
When was the last time you used pennies to pay for something?

Pennies are a useless waste of the government’s resources.

Zinc is getting more expensive to mine, and the zinc blanks that we use to make pennies cost more than the pennies themselves are worth. The government literally loses money every time they create a penny! As of 2016, it cost 1.56 cents to mint a penny.

And as zinc mines close down and zinc prices increase, we may begin to see instances of people melting down large quantities of pennies in order to sell the zinc inside them for more than the worth of the pennies themselves.

Plus, we’re already moving away from a cash economy anyway. Most people in this country, except for the very poor, have bank accounts. Bank accounts have debit cards, and people who use debit cards generally don’t even carry cash.

When was the last time you used a penny to buy something? Even if you do buy things with cash, and statistically there’s basically a ¾ chance that you don’t, when was the last time you actually used coins to pay for something? Sure, you may get pennies in change, but typically people using cash stick to quarters and bills, and maybe nickels and dimes when they need to.

But pennies just go into a jar, eventually to be exchanged for dollars at the local CoinStar.

Plus, the median wage in the US is so high that many people in the US earn at least one cent every 2 seconds. Because the penny is such a meaninglessly small denomination of money, it has almost become worthless. In fact, if it takes you three seconds to bend down to pick up a penny, the time you spent to obtain that coin was worth more than the coin itself; you’ve actually lost a tiny bit in that transaction.

There are millions of pennies already in circulation too. Even if we don’t need to phase them out totally, stopping production of pennies cannot possibly be a bad idea economically. The US Mint lost $46 million dollars producing pennies last year.

The zinc lobby, however, recognizes that penny-production is one of the main uses of zinc in this country, and they have historically fought tooth and nail to protect America’s most useless currency.

But why should the American people be held hostage by the zinc lobby? Zinc is one of the most d-league metals out there.

Some people say we should also get rid of the nickel, too, because, again, who uses nickels? Nickels also cost more to produce than they are worth at face value. As of 2017, a nickel cost 5.94 cents to produce.

Still, the penny costs more to produce than it’s worth by a much greater margin than the nickel. The over-cost of production on a penny is more than half the value of the coin. So every time the government makes a penny, they burn half a penny to do it. The dead-weight loss from a nickel is less significant; the government only loses about a cent on every nickel they make.
So if 100 pennies are minted, the government loses half a dollar to create a dollar’s worth of coins. But if 20 nickels are minted, the government loses 20 cents to make a dollar’s worth of coins. Still not great, but not quite as bad.
Now, nickels also happen to be probably less useful than pennies, because there are already two kinds of coins out there, dimes and quarters, that are in denominations of five. At least pennies can be used to pay for things that don’t round evenly into fives. (Though the government could always pass a law saying all prices on consumer goods have to be in 5 cent increments.)
There’s no situation in which a nickel is going to be necessary to make change, and almost no scenario in which its going to be more useful than just handing somebody 5 pennies. (Given that 5 pennies are lighter than 1 nickel.)
So, even if we can’t get rid of pennies, we should at least look into ridding ourselves of the useless and expensive nickel instead.