What we do to literally cut the value of our money in half
Bottom Line: It’s been 17 years since the US Mint could actually produce a penny and not lose money doing it. Our federal government does a lot of foolish stuff with our money, but arguably none more foolish than intentionally using money to literally create money at a loss. The US Mint has (thankfully) slowed coin production during the pandemic as physical currency has never been less utilized in our society. But one takeaway from their work in the first half of 2020 has been just how absurd it is to continue to create pennies.
How much is a penny worth? This isn’t a trick question. Now how much does it cost to create that penny? If you guessed two cents you’d be correct. That’s right, with the rising cost of many metals – including gold closing in on all-time highs – it took 1.99 cents for the US Mint to create a penny through the first half of the year. It might be the most absurd use of our money to date and its clearly time for the penny to go. That’s not to say we should necessarily stop there either. In the COVID-age, we’ve learned viruses can last longest on plastics and metals. By passing along change we might be passing around more than intended. The cost of metals have made most forms of change as waste of our money. For example, it now costs seven cents to create a nickel too.
While many are reluctant to embrace digital only currency, it’s already the norm for about 70% of Americans and only growing significantly during the pandemic. For all of the ways government can waste money – literally destroying it by creating money has to be at the top of the list. The time for a change with change should happen sooner than later.