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Moderator
 United States
188440 Posts |
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Here is my question....why does the mint need to be profitable on cents and nickels anyway? As long as the entire program is profitable it is fine. Why does the government need to be a "for profit" entity anyway? To me they should break even! Because the entire program is in danger of no longer being profitable! The mint lost a huge cash cow when they were forced to quit minting the dollar coins for circulation. Conder101 has explained this before... Quote:
... a 60.2 million dollar loss on the cent, a 56.5 million dollar loss on the nickel for a total of 116.7 million in losses. Now on the plus side we have 61 million on the dime, 45 million for the quarter and 382.8 million on the dollar coin for a positive seigniorage of 428.8 million. Total profit then is 428.8 - 116.7 = 312.1 million.
But this year we aren't going to have that great big dollar coin seigniorage so lets drop that out and you get a positive of 106 million and a loss of 116.7 million and we show a net LOSS of 10.7 million dollars! Throw in that loss of 23.3 million for the mutilated and other and you are looking at a total loss of 34 million dollars... https://goccf.com/t/109630#929025 |
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Moderator
United States
188440 Posts |
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...but since Canada can make a nickel and not lose money, then we should be able to do the same. Ideally we should try to be ahead of the curve. A composition change only delays the inevitable. Quote:
...but ditching two coins at once may be to much of a system shock The nickel could probably hang around (without composition change) a year or two after the cent is eliminated. |
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Rest in Peace
United States
9104 Posts |
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Speculation on what the new penny and nickel will be made of The only thing cheap enuf to bring total production cost below face is electrons, the sooner the better. |
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Bedrock of the Community
13014 Posts |
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I'm always amazed at how so many people think about saving a few dollars by stopping the Cent and/or Nickel. Our government blows billions of dollars on almost anything and everything. It is well known how they spend hundreds or even thousands on a hammer. Politicians have massive expense accounts and use them extensively. their salaries are so far above the average person, it becomes humorous. Yet we worry about the cost of making a penny.
And just how many run out to banks as soon as the new ones come out so they can get them? How many send to the Mint for rolls of those things we shouldn't, don't need, cost to much to make coins?
So the next coins will be all Steel. And since so much of our Steel comes from China, that is where our coins may well be made in the future. OOOPPPs. Some are already made there. While eliminating the cent certainly wont balance the budget, you need to start somewhere. If the mint can make an extra few million or more a year by eliminating a coin that no one really uses anyway why not. Dont forget its the attitude in the government of "oh its only a few million" that got us in this position in the first place. If we can make unnecessary spending costs such as this across the 100s of thousands of government programs the savings really will add up. |
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Pillar of the Community
United States
927 Posts |
I am in favor of eliminating the cent entirely and change the composition of the nickel, probably to nickel plated steel or something similar. I think because Canada is eliminating the cent this year, it will be given serious consideration in the US also. But I also read recently (I forget where) that the US Mint would actually lose less money by continuing to make the cent and nickel than if they stop making them. This is because the fixed costs of production would then be allocated to just the dime and quarter (basically), which would raise the costs of these coins to a net loss. They should balance this out by making the dollar coin for circulation again. This would help significantly.
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Moderator
United States
188440 Posts |
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While eliminating the cent certainly wont balance the budget, you need to start somewhere. If the mint can make an extra few million or more a year by eliminating a coin that no one really uses anyway why not.  Quote:
But I also read recently (I forget where) that the US Mint would actually lose less money by continuing to make the cent and nickel than if they stop making them. This is because the fixed costs of production would then be allocated to just the dime and quarter (basically), which would raise the costs of these coins to a net loss. I am skeptical, but if true I do like your dollar coin solution.  |
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Valued Member
 Canada
262 Posts |
3 solutions: 1. ditch the penny and nickel at once, shock the economy but end all losses 2. change the composition of the penny and nickel to an extremely cheap steel with tiny copper plating and tiny cupro-nickel plating while melting all old coins down for profit [my preferred] 3. Ditch the penny, switch to steel nickel Even 2.5 percent copper plating on a penny is too expensive, would .9 work?  A tiny cupro-nickel plating on the nickel would bring it back to profitability [Canadian one costs about 3 cents to produce]. Edited by MercuryDime
05/12/2012 2:32 pm
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Bedrock of the Community
13014 Posts |
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Even 2.5 percent copper plating on a penny is too expensive, would .9 work? No matter what the Penny is made of it will lose money. Im not a fan of the cheap coins some other countries make to save money on small cents. If youre going to make the coin make it right. It is okay to lose some money on some of the coins you make. With that said though the only way to justify that is if the coin is actually useful. Here is where we have the problem with the penny and really even the nickle at this point. They have 0 purchasing power and in the old days would have been eliminated long ago like the Half Cent. But for some reason we hang onto it just because thats what weve always had. You cant even buy a gumball with a nickle anymore and there is nothing you can buy with a penny. Really the only use a penny has is to make chance for cash purchases which are on the decline as well, and to throw in fountains at the mall unless you collect them. When the majority of people dont care if they get their pennies back in chance or just stick them in a change jar at home its time to eliminate that coin |
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Pillar of the Community
614 Posts |
Personally, I think that we should use Europe's example, sort of. End the penny. End the Nickel. Keep the Dime. Change the quarter to 20 cents. Re-introduce half dollars. Keep dollar coins. Make 2 dollar coins. Make 5 dollar coins. Remove 1, 2, and 5 dollar bills. :)
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Valued Member
Canada
262 Posts |
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No matter what the Penny is made of it will lose money. Not if you make it out of lint. |
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Pillar of the Community
United States
927 Posts |
That's a great idea. We could recycle a lot of lint that otherwise goes into the garbage or into corners of a room, then the Mint could make pennies out of it (they would figure out a way). It solves 2 problems at once. Brilliant!
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Pillar of the Community
United States
2269 Posts |
It the government can actually eliminate the Cent and change the composition to the Nickel in our lifetime, it would be somewhat of a miracle. I will personally miss the Lincoln Cent, but I understand why it no longer makes sense to mint it. That being said, if the Lincoln Cent is eliminated, I hope that it is still produced exclusively for Mint and Proof sets. This has been done before with the SBA dollar and recently with the Kennedy halves, Presidential dollars, and Sac's. If they decide to make a Lincoln Cent for collectors, I hope they would mint them in the original composition, then they can mark up the price of each set by a few dollars. |
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Bedrock of the Community
13014 Posts |
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Not if you make it out of lint. It could be made out of dirt and still lose money. For the penny at least the material isn't the issue, but the cost of production which last time I saw I believe was just over a penny to runs the presses employees ect. If its going to stay I hope it stays the same as it is now, but my vote is to get rid of it all together and keep it for proof sets only where they sell at a premium anyway. |
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Pillar of the Community
United States
997 Posts |
The solution is obvious. Devalue the dollar by a factor of 10.  Make each coin of the new Dollar somewhat different, brass colored coins of 1, 5 and 20 "New Cent" denominations, silver colored coins of 50 New Cent and 1 "New Dollar" and bi-metallic coins of 2 and 5 "New Dollar" coins. Bills would be 10, 20 and 50 "New Dollars". Old coins and bills would retain legal tender status but collected at banks for return to the Treasury for disposal. Eventually they would disappear from circulation much like Silver Certificates and US Notes as well as silver coinage did. As for composition of the new coins I would suggest the same copper-tin used on pre-82 cents for the 1, 5 and 20 New Cent coins, and the same CuNi alloy used for current Nickers for the larger denomination coins. The new 2 and 5 dollar coins could be a silver-nickel mix due to the higher relative value of the coins. Edited by n9jig
05/13/2012 08:46 am
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Valued Member
Canada
262 Posts |
I agree that the penny should be eliminated, but we all know the American government is stubborn. To create the cheapest cent possible and a profitable nickel may be the immediate future.
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Replies: 54 / Views: 6,276 |
First Page
Posted 05/08/2012 2:54 pm
