Do You Think We Will See The Penny Disappear?

I thought the prank article was cute. Too much extraneous detail gave it away too early though

I hope this formatting works, but you missed something so I highlighted it. man miss it. The Mint employees are not on commission to the number of coins they make. hey get paid an annual salary. This means that no matter how many of a coin type they make, they will make the same thing. If they stop making the $1 coin when the Pre$/NA dollar act runs out n 2016, they will still be paid the same. This goes true to the penny as well. If the penny and nickel end, that will be a LOT less coins the mint has to make, as they can spread out the other coins over the time to make them either by shortening the workday, or firing people that are redundant. Penny quality control.

This is a key thing that when talking about the cost to make a coin, it MUST be included somewhere, but we have NO idea host much of the cost outside of material is for labor. I can only assume the entire mintages added together, divided by the salaries of the employees, then that base value "per coin" figured in some way if how the labor cost of a coin comes into play. So West Point and San Fran may have more exact way to track or be esier if mintages for them are known, but Denver and Philly that makes every coin, AND coins for other countries, we just don't know the costs.

Sure we and anyone else can find the mintage for the penny and the cost and guess how much is lost for the penny, but the Mint cannot micromanage such things as they don't have people that ONLY work on the penny. The engravers and designers do ALL coins. making the mother mold to make the die from, is the die making department, not the penny making department. the forklift/tow-motor drivers don't just move the bag of copper blanks or finished pennies, they move ALL coins about.

So you MUST look at the BIG PICTURE and see everything that the mint operates on and produces to see if it is making or losing. It makes coins, How much does it cost to make coins for other countries? Don't they make a profit there that could support your $50 million penny cost? When you look at the seigniorage of dollars, halves, quarters, dimes, nickels, and pennies, there is a gain, not a loss. If is from ALL coins being made and that seigniorage that is earned when the Mint releases those coins to the bank and gets money deposited into an account for them that the Mint can pay those employees. Next Month the Mint will begin making the 2016 ATB Quarters as the first month of the federal fiscal year.

People need to stop thinking like the Mint is McDonalds and if the McRib isn't bringing in enough money next week, they remove it until another season comes to bring in people that miss it to boost sales. It isn't a fortune 500 company that can drop one product line to raise another as the Mint only has ONE product line, making coins. Eliminated the penny also wouldnt mean more dimes, quarters, dollars or halves are mode, so there is no extra seigniorage to gain even if more time and other resources are had.

Let's stick with the floating $50 million that someone said is lost making the penny and tell me what the cost is to reprogramming every computerized system in the country to round the #1 value currency in the world?




Ok let's not worry about China since they will fake any coins anyway and just stick to the US. How much will it cost to reprogram every payment system for the elimination of the penny? Did ebay change for its Canadian sellers when they got rid of the penny or does it still calculate on 1/100th of a cent? been so long since I was at the Canada version of ebay or seen anything in CDN only?

If the USA wants to emulate Canada with something that worked, then doesn't the DCA have the better idea for a stable 26 year old system?

1989 Canada eliminated the $1 bil in preference of the loonie. Bills were phased out over the next few years and bill no longer made after 1991 or something like that. Following in 1996 the toonie came about ending the Canadian $2 bill. Sure it was rejected at first same as the loonie (which is jsut a gold colored Susan B Anthony with a new design, but complete with the 11 sides), but when there were no more $1 bills what could you do? Older generations suffer in their defunct ways, while newer generations that only had to loonie act like nothing is wrong, because it isn't. To them it is just natural. Like anyone today in the USA not using a 3-cent piece.

No sure the penny coin be the same way, so could sizes of coins be bigger with higher denomination and in time the younger will think nothing of it. But my point is, IF we want to emulate Canada so much, then take some power away from the FRB and give it to the Mint for seigniorage and force the end of the $1 bill in favor of the $1 coin. That is going to hit pretty hard with 10 times the amount of people than Canada has. THEN Once people have adjusted if there is a need to remove the penny, they will have had plenty of time to research other alternative materials and methods, and IF the penny is gone, it will be nothing major like, "OMGWTBBQ!!11! what do I tip my exotic dancer with now there is no $1 or $2 bills?!"

But hey, the US is all about making rash decisions and forcing cents-less change (pun intended) in bulk onto people. Like a classic rock station on the radio switching to only play Miley Cyrus and Justin Bieber.

SO the cost of changing to a penniless system versus the amount the US Mint will save, when the US Mint still makes an overall profit in seigniorage is what? It helps politicians, but does it help "We The People"?

Not much if anything at all. It should be the same as when the sales tax rates change.

I had a hand in writing a POS system in the 1990's for my former employer (a team of three, which became two). Back then it seemed like the sales tax changed every month. (Our state has a local option that made it different on a per county basis, and counties loved to add revenue!) Good thing we made such things a simple change in the configuration. No sweat.

Yes, for what it is worth, that same POS system supported rounding to the nearest nickel, dime, whatever. Back in 1996. That is how long we have been talking about nixing the cent. I was preparing for it even then.

Before you ask, yes, that software was ready for Y2K as well.

ah, but in 2001 the Annual Report claims even the penny was making a profit, so you were 5 years too early.

Well keeping the dollar bills gains nothing, it doesn't have seigniorage and the dollar coin does. All machines can now take it for vending purposes as well as giving change. So why had it been 26 years in us getting rid of the dollar bill in favor of a dollar coin like Canada, other than those at the time looked like quarters, since 2001 that excuse can't be used anymore.

Canada was forced to not have the penny, dollar bill and 2 dollar bill. Why does the US still need the dollar bill? those people needing to be tipped in bills only can have store coupons that are valued less than $5 that they can turn in at the end of shift for coins and/or larger bills. (this isn't easy to say family friendly, so I hope you know what I am meaning jbuck.)

isn't the disposal and short lifespan of the dollar bill also a subsidy? 18 months vs 50+ years? if they only cost the same then it is obvious that the coin outlives and is a better value than the bill, but its worse because old bills must be burned, and then the ashes buried in special armed dumps! that is a cost NO coin has because the metal can always just be melted down to make a doorknob. (They tarnish just like a brass doorknob anyway!)

So which will be louder and harder to deal with? dollar coin replacing the dollar bill which already has everything in place and only a change of mind (and no collection/replacement/disposal costs), or removing the penny that will take extra work.

Sure you can try to kill 2 birds with one stone, but if you are going to rock the boat, do it softly otherwise you will be all wet.

I am now checking all those annual reports from 2001 to find missing data like halves data to figure that math I was doing. currently dimes the size of nickels ruin it all, but pennies the size of dimes and nickels the size of pennies are still over face value but greatly less in cost. the problem is dimes are already twice as much "stuff" as nickels are so it would double the cost, so finding the halves info would help if I can figure out how to reduce the quarter mintage and replace it with halves anywhere halves can be used as change, since a quarter by looks only offer face value of 2 times over cost (1:3), but halves offer a face value of 3 times over cost (1:4). I am thinking cut the quarter mintage in thirds and make the same number then of halves as the remaining quarters, and there should be enough to use for making change and cashing checks. The current supply of quarters wouldnt even take a hit, just people would have to get used to using halves again for any change from 50 cents to 99 cents.

Exactly, anyone saying getting rid of the penny is good is just lobbying also. The clearest proof is Canada was right about the dollar, and with nobody knowing really what benefit bills offer, the cost of disposal of jsut defective bills each year is about $4 million. No idea what cost are to disposing returned, mutilated, etc bills that have to be disposed of. And that doesn't count in the cost of anything but destroying them, no employee costs, no transportation costs for the ashes, and no burial costs and security for the burial site, if that even is a thing.

at Current a US $1 note costs 4.9 (5 cents) to make with a lifespan of 5.8 (6 years). As well all know Coins are legal from 1793 to now, and we can easily find 50 year (1965) old coins in good condition in circulation. so we have 50 years lifespan will coins.

50/6= 8

it takes making 8 bills to last as long as a coin does. Now I think they over-estimate the lifespan of bills. One quick snatch from a drawer or wallet and a tear is easy. But the cost of making bills over that 50 years is 8*5=45 cents. it takes currently 20 cents to make a dollar coin that will last that long. Now obviously the increased coin use might just make the coins last longer, but still you dont have the $4+ million cost to disposed of them.

Sure you can easily look at that math and look at the annual report and see the "loss" for making the penny, but again, the mint doesn't just make the penny. its making an overall profit.

42.71 million dollar coins (NA/Pre$) were made in 2015.
2,451,200,000 dollar bills were made in 2015.

if the mint made all the $1 money and no more $1 bills were made that would easily cancel out the cost of penny or nickel don't you think? And before the math even remember they still have "billions" of dollar coins that are not in circulation sitting in warehouses from the SAC runs that didn't get adopted. So they have enough to go around for now as they phase out the bills. Now for the math on seigniorage.

78 cents per dollar coin is seigniorage. $1,911,936,000 seigniorage. that is almost $2 billion more for the mint. is the cost of pennies and nickels exceeding $2 billion? Nothing would have to change at the mint. The BEP has to change nothing either. They just have to stop making the lesser security feature bills and only have to order the higher security paper. The mint has everything in place to make the dollar coins. As time passes, they would need to replace less coins yearly, so the mintage number would go down because again, coins last 8 times as long as bills. Now the order for 2016 is 25 million less of $1 bills.

Again, if ANYONE would explain if there is anything such as seigniorage to bills or whatever that might help me understand your position better, but $2 billion more for the mint per year, seems to be a heck of a better number than $53 million.

Would you rather be given $2 billion tax free or $53 million tax free?

Also who says their orders for coins are even based on anything real? 2009 skewed the numbers and should be excluded as an outlier since it created a false scarcity. People are hoarding them! Why are people hoarding copper? Because they don't like the stinkin' zincolns!

Pennies being hoarded by collectors, real ones, not melters, as for obvious reasons just like the State/ATB and other commerative coins. The fact they are circulation means nothing. More people collect circulation coinage than do "Mint sets" or whatever for "collector's only" because coin collecting started as the poor man's way to have something since he couldn't keep Van Goh paintings like the robber barons were doing. (stamps gave some art, but not everyone collects both stamps and coins.)

Silver was removed, coins hoarded. Really they didn't see this one coming?
Design change and the older design is prefered. They didn't see this coming eaither?

1958 Wheat
1982 Copper
2009 Memorial
2010 Shield

Copper is a useful metal and its greater content was removed mostly within the past 4 decades. That is why so many coins are "disappearing", just like when Kennedy died and ALL halves were snatched from circulation until the clad came along. Then that 5 year period made halves obsolete because places found other things to put in their tills. So the metal content is a clear reason for coins to disappear. Steel cent isn't even there, but how many do you see today, and its not even a special metal! Its the novelty and oddity/rarity of a coin that causes people to hoard them. Pennies are just the cheapest and easiest to hoard in large numbers. Remember the FRB has billions of pre-2007 $1 coins sitting around? Half the "gold" dollars I spend end up being hoarded. This is simply because they arent out there and a novelty to many.

So there is no real metric to what the masses will collect or why because it is all personal. Which is why it is hard for me to answer when someone asks things like "Which quarters should I keep?" as it is personal choice and preference. But a penny for your thoughts on if the fact the penny is so cheap and easy to keep by any class (upper, middle, lower) why would they all be in circulation and not "disappearing" as they are most likely the first thing collected by a young novice collector? or at least were before the false collectability of the State/ATB quarters.

Hear hear

(or is it "here, here"?)

I think that was the same result in Canada when they introduced the Loonie and stopped printing the paper dollar. After a couple years of 100 million or more it leveled off to much smaller numbers, and there were a few years when none were made for circulation.

This is typical for such a change, you need a whole bunch at the start to get them in wide use and replace the former devices and once that is done the mintage levels rationalize.

I would suspect that when cents are withdrawn that more nickels will be needed.