Abdelrahman
President Trump has recently instructed the U.S. Mint to cease penny production, citing a straightforward reason: each penny costs “literally more than 2 cents” to make. This statement reflects a significant economic reality, as the government has spent more on minting pennies than their actual value since 2006.
Understanding the costs associated with coin production can be perplexing. For instance, a nickel is worth only half as much as a dime yet incurs double the minting expense. Additionally, while it used to cost less than one cent to manufacture a penny, that figure has increased to about 3.7 cents. Interestingly, in 2011, the production cost for a quarter was lower than that for a nickel, but currently, both coins share similar production costs.
Reducing the expenses involved in coin manufacturing is a challenging task. If cost savings are the primary goal, completely halting production appears to be the most effective solution. This is largely due to the fact that production expenses are directly linked to the fluctuating prices of raw materials, such as zinc for pennies and mostly copper for nickels. Rhett Jeppson, a former CEO of the U.S. Mint, noted that during his tenure, he encountered various innovative proposals, such as creating pennies from plastic; however, none were deemed feasible for implementation.
