I read this article this morning about the true value of the U.S. penny. According to the article (I could not find the exact numbers myself from the U.S. Mint), it costs 1.26 cents to make a penny. This number is down from the end of 2007 figure, which was 1.67 cents. Still, it costs more to make the thing than its actual face value. In 2008, the mint will produce 1,536 million pennies, according to the Mint. That’s $3,993,600 we’re losing, annually, just from making pennies using the current method.
Congress and the Bush administration are busily trying to come up with a new, cheaper method for penny making, as the value of metals increases. I have a better idea – get rid of the penny. We would save about $19 million this year, which could be used to offset the debt we’re incurring from producing nickels. Australia did it in 1991, abolishing both the 1 cent and 2 cent coins from circulation. Vendors were given the option of rounding prices up or down to the 5 cent mark. They haven’t economically drow0ned – we should be able to, as well. It might even force some of our retailers to gain a better grasp of basic math. Better yet, let’s kill the nickel, too. Bigger coins don’t cost more than their value to make, so why not kill the little ones? Will we miss them? Really?