Alert Penny And Nickel Composite About To Change

While the original post appears to be based on outdated information, I would like to include this much more recent (as in, it was 3-4 weeks ago) comment from Obama (relevant article sections copy/pasted from Huffington Post):

During an online "Fireside Chat" with a random group of Americans, one questioner asked Obama why the United States is still minting pennies when so many economists agree they are economically inefficient and can't even be used for certain coin-operated machines, such as toll booths. The moderator of the event noted that the penny question was the number one question in the economy section of YouTube.

"I gotta tell you ... I don't know," Obama replied. "It's one of those things where I think people get attached emotionally to the way things have been ... We remember our piggy banks and counting up all our pennies and then taking them in and getting a dollar bill or a couple dollars from them, and maybe that's the reason why people haven't gotten around to it."

. . . .

He went on to call the penny "a good metaphor for some of the larger problems that we've got," pointing to the fact that the government has problems getting "rid of things that don't work so that we can then invest in the things that do."

. . . .


"The penny is an example of something that I need legislation for," he added. "Frankly, given all the big issues that we have to deal with day in and day out, a lot of times, it just doesn't, we're not able to get it."


So, Obama actually agrees with the vast majority of this forum that

1) It's time we stopped minting the cent just because
2) We're cent-imental about it (you can groan or give me a badum-tish here).

My only objection is the part of the article I bolded--can't he, technically, pass an executive order to halt production? I mean, he says in a section I deleted that it wouldn't be a "huge" savings for the US, but I whipped out my handy-dandy calculator and friend Google and got this information:

As of March 2012, the US mint gave a total number of minted pennies for the year of 1,370,000,000 (one billion, 370 million). I got to that number by adding together their YTD figures of 557.2 million for Philly and 812.8 million for Denver. Multiply that by 2.47 (the cost of minting a penny as given in the HuffPo article--remember that we're still working in single cents, so no, it shouldn't be .0247 yet), and you get 3,383,900,000 (three billion, 383 million, 900 thousand). Divide that by 100--one hundred cents in a dollar. I come out with $33,839,000. Thirty-three mil is no small chunk of change even for the government. But let's not stop there:

The current nickel costs 11.2 cents to make, according to CNN Money. The US Mint figures for YTD March 2012 give a total mintage at that point of 274,560,000 nickels for the year. Multiply that number by 11.2 (the current cost) and you get 3,075,072,000. Divide that by 100 and you get $30,750,720. Next, multiply the original number (the millions of nickels) by 5. You'll get 1,372,800,000. Divide that by 100 to get $13,728,000. Subtract that number from the $30etc. and you get $17,022,720--that would be our savings if we changed the composition of the nickel to be exactly equal to its face value.

Ah, but let's not stop there, shall we? It costs 7.33 cents to make a quarter. I doubt we'd find an equivalent anywhere in the world that would let us make a nickel for the fraction of a penny that would be proportionate in terms of profit, but let's say we change the composition of the nickel to be equal to the current penny: 2.47 cents (since dimes and quarters cost less to mint than their face value). In that case, our total cost to make nickels would be $6,781,632 for $13 million worth of nickels, and our total savings over the current cost would be $23,969,088. Add that to $33,839,000 (savings by eliminating the penny) and you get $57,808,088.


According to allgov.com, the Mint's budget is $2.1 billion per year. So unfortunately, Obama's right--in the whole scheme of things, this is not a lot of money. It could be a lot if the government changed our money AND changed social spending to preventative rather than reactive ("let's keep jobs in this country so people aren't out of work, and make unemployment a secondary concern," as just one example) AND stopped wasting taxpayer money on pork (Why on earth did my tax dollars go to fund an Elvis Presley museum? Isn't that what Graceland is for?) AND you get the idea, but on its own, that $58 million isn't even a full ten percent of the Mint's budget.