Americans seem to have a love/hate relationship with the penny. The purchasing power of a penny has become so irrelevant that most people will not bother to pick one up off the street. Yet despite the penny’s low value, most Americans will admit that they save pennies. There probably aren’t that many homes in America where you cannot find a bottle or coffee can filled with pennies that just seem to pile up over the years.
The penny’s role in commerce has long lost its usefulness. How many millions of hours are spent by cashiers giving customers change on a purchase? And who hasn’t been annoyed at wasting time trying to fish a penny or two out of our pocket so that we can pay the exact amount on a purchase to avoid getting back more pennies?
Despite the nuisance of using pennies, every attempt by Congress to agree on doing away with the penny has failed. The penny has become an American tradition with a history going back hundreds of years. It’s not easy to stop doing something that has been done for a really long time even if it makes no sense.
Despite the low value and general uselessness of a penny, the U.S. Mint keeps producing billions of pennies per year. During 2012 the U.S. Mint produced and shipped 5.8 billion cents. Most people have no ability to conceptualize things in the billions, but here’s one way to put it into perspective. In a country with a population of about 315 million people, 5.8 billion pennies come out to only around 19 new pennies per person per year.
The silliest part of producing pennies, for those keeping an eye on government spending, is the fact that last year each penny cost the U.S. Mint exactly two cents to produce. The value of 5.8 billion pennies is $58 million which means that the U.S. Mint spent $116 million producing 5.8 billion pennies that were worth only $58 million.
I know many people love the penny, so let’s also talk about the nickel. If you’re thinking that nickel production is also a money losing money pit operation for the U.S. Mint, you would be correct. In 2012 the U.S. Mint produced 1 billion nickels at a cost of $0.1009 each which resulted in a loss of $51.2 million for the Mint.
The amount of money lost by the U.S. Mint becomes quite significant over the years. For the period 2006 through 2012, the U.S. Mint lost a huge $469 million dollars producing pennies and nickles. It is almost a certainty that in every town and state of the United States, each of us can easily think of many more productive ways to spend $469 million.
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