US President Donald Trump has proposed ending the production of pennies, citing their high cost as a waste of resources. The decision comes amid his administration’s focus on cost-cutting measures.
The debate over eliminating the penny has been ongoing for years, with various politicians and economists weighing in on the issue. While some argue that the penny is no longer necessary due to its low value, others point out that its elimination could have negative consequences for certain groups, such as charities.
The US Mint produces approximately 240 billion pennies, with the majority of them being made from zinc and plated with copper. However, producing these coins comes at a cost, with the unit cost exceeding the face value in some years.
Proponents of ending the penny argue that it costs more to produce than its worth, which can be as low as 2 cents. Economists like Harvard’s N. Gregory Mankiw have pointed out that the monetary system is no longer designed to facilitate exchange at a one-cent level.
On the other hand, opponents of eliminating the penny, such as Americans for Common Cents, argue that doing so would lead to a significant increase in costs for businesses and could even impose a “rounding tax” on consumers who use cash.
Source: https://time.com/7215870/trump-us-penny-mint-costs-one-cent-coin-debate-explainer