Every year in congress there is an ever-growing debate about whether pennies should be completely eliminated from the U.S. currency, making the nickel the new lowest denomination of coin.  And recently, President Trump issued an order to the Treasury Department to stop producing pennies.  Although two (2) things come in play here:  1. It’s not clear if he has the legal authority to do so.  — 2. Stopping production does not (at least immediately) mean that they will be removed from the currency.   A popular argument against the penny is that it actually costs more to produce each one than it is worth. Though pennies today are not made of copper (pennies today are made of zinc blanks, then electroplated with copper). Nonetheless, pennies still cost more to produce by the time they get to the banks than they are physically worth.  The U.S. Mint said the cost to make a penny in fiscal year 2024 was 3.7 cents.  That is calculated by the three (3) cents for production, and 0.7 cents for administrative and distribution costs.  But if you reason along those lines, then that also introduces a new problem…  …It costs 13.8 cents to produce a nickel, with 11 cents going to production, and 2.8 cents going to administrative and distribution costs.  Naturally, that begs the follow-up question:  “Should we then also abandon the nickel?”

     But the case against the penny is multifaceted, primarily with second argument against its currency is that it adds administrative costs for both the government and private corporations to what is perceived to be “not worth the time and costs for auditing and accounting.”  Moreover, many auditing and accounting firms contend that handling and counting pennies also cost more than they are worth. Many countries have already eliminated the “penny” though it may not be called a “penny” in such country from the use of such arguments.

     Thus, if/when the penny is no longer produced, and further phased out of the U.S. currency, it is contended that it will actually be worth much more than a penny from the simple collector item standpoint. Additionally, the physical material that the penny is made of could be worth substantially more pound for pound in future years.  Hence, the advocation to “save your pennies.”