I guess this news shouldn’t be surprising. It had to happen sometime.
For the first time in U.S. history, the cost of manufacturing both a penny and a nickel is more than the 1-cent and 5-cent values of the coins themselves. Skyrocketing metals prices are behind the increase, the U.S. Mint said in a letter to members of Congress last week.
The Mint estimates it will cost 1.23 cents per penny and 5.73 cents per nickel this fiscal year, which ends Sept. 30. The cost of producing a penny has risen 27% in the last year, while nickel manufacturing costs have risen 19%.
So the real question is: What do we do about it? There’s been a push to get rid of the penny for some time. Should we also get rid of the nickel? What if we simply made the nickel smaller? This doesn’t directly effects your personal finances, but it’s interesting nonetheless.
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Making the nickel smaller is certainly possible. There will be some unintended side-effects to deal with, though. Specifically, I’m thinking about how that would affect coin-operated vending machines, not to mention the blind.
On a similar note, I’ve long heard the rumor that printing dollar bills is also a net loser. Supposedly, that was the drive behind the Sacajawea (sp?) dollar. People just don’t like dollar coins, though.
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I think it’s premature to consider abolishing the penny and the nickel b/c of some quick cost comparison. Manufacturing costing is a tricky discipline and there are many ways to arrive at a “final cost” answer.
Is the “cost per penny” ONLY the incremental cost to make one unit, or “loaded” with the costs of overhead? Is it just the copper?
If you get rid of the penny & nickel, what is then the cost to the US of changing sales tax, prices, and financial institutions to deal with remainders or rounding?
Rather than get rid of small change (which is no small change), it’s better to look at ways to reformulate the materials composition in pennies and nickels. Reduce the concentration and you reduce your cost, assuming no other increases to the manufacturing side other than a one-time R&D/project cost.
Interesting stats, but I likes my Abe Lincoln and TJ, both on bills and coins.
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Once we had half-pennies. Some states had tax tokens worth a tenth of a cent, made of aluminum or plastic. What a pain! Pennies have outlived their usefulness. And what can you buy for a “big” nickle? Kill them and start with the smallest coin, a dime. Price stuff sensibly–3.99 is $4.00! We’ll quickly get used to it. Ignore the complaints of the mining interests and people who set the price of a gallon of fuel to fractions!
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everyone sets the price of fuel ending with 9/10 of a penny, that’s just to make it look cheaper than it actually is, not because of anything to do with actual change.
I want to keep nickles and pennies! if we get rid of them, everyone will take their prices up that tiny amount to make up the difference, and I won’t be able to save them anymore!
also, I can’t help but think one thing, every time I hear this- aren’t they making enough “profit” printing twenties, fifties, and especially hundred dollar bills to render this a moot point?
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