You’ve heard the saying, “A penny for your thoughts,” right? Well, that might need an update to, “A nickel for your thoughts” . . . because it looks like the government is moving toward getting rid of the penny.
President Trump has reportedly instructed the Treasury Department to stop minting new pennies, arguing that they cost more to produce than they’re worth.
Quote: “For far too long, the United States has minted pennies that literally cost us more than TWO cents each. This is wasteful! Let’s cut unnecessary spending from our great nation’s budget—one penny at a time.”
That claim checks out. According to the U.S. Mint, each penny actually costs 3.7 cents to make. But as with most things, the situation is more complicated than it seems.
The Problems with Killing the Penny
- Nickels aren’t much better. Experts say eliminating the penny would increase demand for nickels—which also cost more to produce than their face value. Each nickel costs 13.8 cents to make.
- Prices could creep up. Without pennies, cash transactions would round to the nearest five-cent increment. And let’s be real—businesses are more likely to round up than down.
When Canada phased out its penny in 2012, a 2018 study found that grocery store prices rose by an estimated $3.27 million per year due to rounding.
The Alternatives Aren’t Perfect Either
If we ditch pennies, we’re left with two main options:
- Move toward a cashless society (which raises concerns about accessibility and privacy).
- Keep things as they are—even though most pennies just end up in junk drawers, lost in couch cushions, or ignored on the sidewalk.
One of the biggest reasons the government keeps making so many pennies is that people don’t actually use them. Maybe the real question isn’t whether to kill the penny—but whether we ever really needed it in the first place.
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