4/5/2012 6:41 PM ET|
Are some coins too pricey to make?
Canada recently stopped producing pennies, and there's a bill before Congress to make US pennies and nickels out of steel to cut costs.
Next time you feel like giving someone your 2 cents, you won't need more than a penny. That's because when you factor in materials, manufacturing costs and overhead, it took 2.4 cents to produce a single Lincoln cent last year, the U.S. Mint says.
Those nickels hiding in your sofas and purses are pricey, too. It cost roughly 11.2 cents to make one U.S. nickel -- like the penny, more than double the coin's face value.
Critics suggest it's time for the Mint to start pinching its pennies. A bill before Congress would mandate a switch to a cheaper metal -- steel -- for pennies and nickels.
And that bill doesn't go far enough for some critics. They'd like to see the U.S. scrap pennies altogether, as Canada decided to do last week. Canadian pennies had been costing the government 1.6 cents each to produce. (Read "Canada kills its penny.")
Other U.S. coins are cheaper in comparison to their face values. For fiscal 2011, production costs per coin were:
- Dime, 5.7 cents.
- Quarter, 11.1 cents.
- Dollar, 18.0 cents.
Despite the overall cost of production, the metal in today's U.S. penny -- 97.5% zinc and 2.5% copper -- is worth barely half a cent. The metal value of a nickel, which consists of 75% copper and 25% nickel, is about 5.5 cents.
Do you have pre-1983 copper pennies in your change jar at home? The metal in those coins is worth about twice their face value, which is why today's pennies are only copper-plated.
But don't get any ideas about melting down your loose change. The Mint says that's illegal, and the penalty can be as high as five years in prison and a fine of $10,000 (that's 1 million pennies).
Ironically, these symbols of America are made from non-American materials. The imported metals are one reason the coins are expensive to produce, says U.S. Rep. Steve Stivers, R-Ohio, who introduced the bill to switch to steel coins. The Obama administration, meanwhile, has asked Congress to give the Mint the flexibility to use cheaper materials.
If Congress does act, it could save U.S. taxpayers plenty.
"We could save taxpayers an estimated $433 million over 10 years in production if we moved to using steel instead of nickel and copper in nickels and pennies," Stivers says. "Plus, the U.S. could see a $4 billion profit from recovering the nickel, zinc and copper from old coins currently in circulation."
Canada's Royal Canadian Mint already has made the switch to steel. Most Canadian coins have been more than 90% steel since 2000.
William Butler Yeats' fans need not worry: His beloved brown penny would still look the same.
"We could dip pennies made of steel in copper to mimic the current look," Stivers says. And there "wouldn't be a noticeable difference in the look of the nickel."
But not everyone is sold on steel. Stivers and Robert Whaples, a Wake Forest University economics professor who has published papers about the nation's costly coins, say the vending-machine industry isn't buying the change.
"Some vending machines still take nickels. And because the machines' technology measures coins based on weight, vending machines would have to upgrade their technology to adjust to the change in weight of a steel nickel," Whaples says. "But those costs would be minimal compared to the savings of switching to steel."
Getting rid of the penny would be an even better move, Whaples says.
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1) The fact that it costs 2.4 cents to make a one cent coin is irrelevant. The coin is not used up when spent. Any given coin lasts for decades and is used in thousands of transactions during it's "life".
2) The US Mint has been trying to get the American public to use the one dollar coin for years, but the public does not use it or want it. The golden colored Sacagewea and Presidential one dollar coins have been made by the billions, and most of them are stored and protected by the US Mint. These coins will probably never see circulation. The metal to make these coins has alredy been paid for. I suggest the Mint melt these coins all down, eliminating storage and security costs, and reuse the metal to strike cents and nickels. The treasury can pull copper cents and nickels out of circulation and recover the more valuable metals.
If pennies are costing 2.4 cents to make, STOP MAKING PENNIES...
If nickels are costing 11.2 cents to make, USE CHEAPER METALS...
STOP WASTING MY TAXPAYER $$$...
By law our money is supposed to be made of metals that have value not paper or not junk metals. But bankers conned stupid elected people into doing it there way! And as our money keeps devalueing, we're being robbed blind! Thanks to D.C. dummys of yesteryear and today......As the value of our dollar drops the cost or manufactureing of everything keeps going up and up and up! I used to fill up my Austin Healey Sprite 10 gallon gas tank with 100 octane gas for less than 3 bucks when my coins were stiil made of silver or copper. Today i put out 45 bucks for ten gallons of 93 octane..good job boys..devaluation of the dollar... thanks a whole lot ....
Sure get rid of the penny!... It won't make any difference as it's NOT a penny! America has never minted a "penny". Pennies are British coins and while the word is common in American English the USA has never made one. So kill the penny all you want. It is an American 1 cent coin, and we should NOT get rid of the American cent. In every scenario, where prices are "rounded", the buyer is the loser and the Government makes hundreds of millions more in the form of an invisible tax.
During WW2 we made the Lincoln 1 cent coin out of various metals to save copper for the war effort. I still have a cache of "tin pennies" as my grandma called them. It is time we look at options to save tax dollars where we can.
Rather than obsolete the penny, it's composition should be adjusted to reflect todays costs. The Treasury could very easily draw back in old pennies, that are in circulation, and melt them down. Todays penny is only .992 zinc and .008 copper. Pennies of 1959 to 1982 were .950 copper and .050 tin and zinc. Naturally there has been hoarding and exporting pennies, because of this content, which is why a law was passed to try to stem it. But it would be very easy to recoup that cost by simply withdraw any pennies that are dated during this period.
We could actually save a lot more money if we simply obsoleted the dollar bill, and replaced it with a dollar coin. 40% of all printing, that is done by the Bureau of Engaving and Printing are for $1 bills, due to the very short life of then due to being the most circulated 'green back' of all denominations. Infact we could save by creating a $2 coin, as well as a $5 coin. And the life of coins is much longer than paper money. So no, coins are not too pricey to produce.
Consider what is going to happen to the economy of the lowest paid workers in America, if the penny is abolished. The smallest denomination then will be $.05, a nickel. Consider that, when this country, until 1857, had a half cent. Where has the economy gone, where has the cost of goods gone?
But unless they were wheats, most rolls of pennies sold on EBay are memorials that are uncirculated. Circulated Memorials have very very little collector value, unless they are error coins.
If nothing else why not ressurect the $.02 piece, or the $.03 piece?
First of all, we haven't made copper pennies since mid-1982. People have been collecting and hording the copper ones for some time now. The mint isn't going to get a bunch of them back to melt down.
The same with nickels. Check Ebay, people are buying up large quantities of nickels and pennies, and not so they can sell back to the mint for even money.
I know for a fact a lot of pennies have been melted regardless of the penalties. At one point they were worth around 3 cents each, in copper value.
People not only collect them for their melt value, but some of the doomsday crowd believes that copper pennies, copper/nickel & silver (WWII) nickels and pre-64 regular 90% silver (and of course gold and silver bullion coins) coins are the only U.S. currency that will hold value when the inflation/devaluation crap hits the fan.
Our money (coins and paper bill) has no value. The coins are no longer made of silver after that year(1964). And the paper notes were once backed either by gold or by silver. not any longer. Read the bills they now say this,: this note is legal tender for all debts private and public. Pretty soon there will be no country that will accept our money because of the devaluation of our money
The debate over eliminating the cost of making pennies is ridiculous. After all these years why are we still making pennies at all. Do we not have enough in circulation without spending money to make more of them. As John Stossel says "give me a break".
Does the deer have a little doe?
YA two bucks,....
3 stooges (orginal)
Oh yea, I forgot to mention, to all of us every person with a bank account.. WE ALL ARE SUCKERS!
You blame everything on the president, congress, senate.. and your mostly right..because most of them on all sides are owned bought and paid for and financed by YOU..Through the BANK! Really look at our history..it all boils down to control.. by who? The banks. they can make or break you..all the money Bill Gates has.. the banks can break him, the ruler of a country..the banks can break him, oh and on the good side the bank can make you..as long as you working for them, but oh miss a few payment.. also who else has you giving them your money for "SAFE" keeping, and charges you to use your own money? Oh yea, and they will pay you for putting your money in, and you dont use it, but will lend it to someone at a few percentage points(mostly over 6), and pay at a rate thats a min. of 1/2 percent to you? Wow! Feeling cheated yet, what about you writing a lil " get by loan" ( a check) for a day or 2, but it bounced even though you put the money in the bank to cover it..but some thing you bought caused you to over draft by $0.90, so they hit you with a OD charge of $30.00.. and guess what.. you take it, because what else can you do move your money to another bank?
So if the banks want you to get rid of the penny on the pretense of saving money LMAO, they will do it anyway, because then everything rounds out to the nearest nickle, and they can make more money! Imagine that 6 billion people times $0.05, per transaction..go figure
If we truly want to save money...let's get rid of coins completely. If we are only hanging on to coins to use in vending machines and stuff our kid's piggy bank, then let's move on! When was the last time you were even able to get anything from a vending machine that cost less than a $1? Rounding is the way to go. Besides, most of the vending machines are now being upgraded to use a debit/credit card anyway. These are the simple things we can do as a country to truly cut costs and it would be the first realistic thing that we could count on to save taxpayer dollars, unlike the wild ideas so many politicians come up w/ to get re-elected. I'll throw in one more idea that is a simple one we could count on while I am on a roll. Flat rate taxes...BTW - Happy Tax Day! Like many other hard working American's, I waited until today to file because I had to pay again this year. If we had "Flat Rate" taxes, we wouldn't even have to file. A simple 15% could be pulled from our checks each payday and we would be done (no more Tax Day!). Then we could close down the IRS and actually realize that savings as well...I think I just cut the American debt by at least 10% annually w/ two ideas, which have been around for a long time, I'm just bringing them up again :)
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