Minting Pennies Costs More Than 1.2 cents per Coin
Regular readers of The EclectEcon know that I have long urged that we stop minting pennies (see here, and the references cited there). Now the Houston Chronicle is reporting that it costs the U.S. Mint 1.2 cents per coin to manufacture pennies. [h/t to MA]
It is time to stop minting pennies (and nickels and quarters, too — let's round everything to one decimal point instead of two).
For the first time, the U.S. Mint has said pennies are costing more than 1 cent to make this year, thanks to higher metal prices. ``The penny is going to disappear soon unless something changes in the economics of commodities,'' says Robert Hoge, an expert on North American coins at The American Numismatic Society.And that does not include the administrative, transportation, and transaction costs for actually getting the coins into circulation.
It is time to stop minting pennies (and nickels and quarters, too — let's round everything to one decimal point instead of two).
Category: Economics, Pennies Posted on
Monday, July 10, 2006 at 12:56am
<< main
On the other hand, the current mix of metals in the nickel (25% nickel and 75% copper) make it very, very close to it containing more than 5 cents of metal. Earlier this year, when metal prices were higher, I calculated that the actual metal in a nickel equalled 5.5 cents--never mind mint costs and transportation costs.
"I'll give you a buck."
"Fity cents."
"Seventy-five."
"Deal."
This powers-of-two was the origin of the eights, sixteenths, and thirty-seconds that prevailed in financial markets long after the advent of the silly-assed decimal system. Why pick base ten just because we have ten fingers and thumbs, or twenty (Celtic system which survives in French and English counting, e.g., "Four-score and seven years ago..." and quatre-vingt) because we have ten toes as well?