Elon Musk’s DOGE would seek to eliminate the penny coin due to its cost
Donald Trump’s entry into the presidency has been dizzying. He has already approved several measures through his executive orders. Within them, he created the Department of Government Efficiency (DOGE) that will be directed by billionaire Elon Musk. And like the president, the owner of X already has his first objective when assuming his new position: remove the penny. According to a recent post on XDOGE wrote that the cost of producing a penny in the United States exceeds its nominal value, which makes it an unnecessary expense for taxpayers. According to the data provided, the US government currently spends more than 3 cents to manufacture each penny, while its value is just 1 cent (¢1). The DOGE highlighted that the US Mint produced more than 4.5 billion pennies in fiscal year 2023, representing about 40% of all coins in circulation. This process cost taxpayers more than $179 million dollars in that same year.. This figure reflects a considerable increase, since in 2016 the cost of manufacturing a penny was only 1.5 cents, less than half of what it costs today. The focus of DOGE is not limited to just the penny. Under Musk, the goal is to reduce federal spending significantly. In previous statements, former President Donald Trump assured that DOGE would provide recommendations to “cut excessive regulations, eliminate unnecessary spending and restructure federal agencies.” Musk, for his part, has made it clear that his group aims goal to reduce annual federal government spending by $500 billion. The rising cost of producing a penny is not new. According to the US Mint’s annual report for 2024, now Approximately 3.7 cents are spent for every penny manufactured and distributed. This is due in part to the increase in the price of zinc, the main material used in its manufacture, whose cost per metric ton has doubled in value since 2016. Over the years, there have been several proposals to discontinue pennies minting, including a suggestion in 2015 by then-Treasury Secretary Jacob Lew. However, some economists have warned that Removing pennies could come with complicated side effects, such as rounding off prices to multiples of 5 centswhich could lead to increases in the costs of small products. Other countries have made the decision to eliminate their low-value currencies. Canada, for example, stopped minting its one cent coin in 2012. A 2018 economic analysis found that, as a result of this move, Canadian consumers paid an additional $3.27 million annually due to price rounding in supermarkets. However, it is recognized that eliminating pennies can also reduce operating costs, such as the time it takes to count and exchange these coins, which, as the old business adage goes, “time is money.” DOGE is not limited to just the penny. According to the 2024 Mint report, nickel is also in the spotlightsince it costs about 14 cents to produce and distribute each 5-cent coin. You may also be interested in:
