The penny’s days are numbered, and Washington is finally pulling the plug. The U.S. Treasury Department has decided to stop minting new one-cent coins starting early next year, ending a tradition that’s lasted over two centuries, as the Daily Mail reports. This move, cheered by fiscal conservatives, aims to curb wasteful spending but might just trade one problem for another.
The Treasury’s decision to halt penny production comes after years of bipartisan agreement that the coin is a money-losing relic. With production costs soaring past four cents per penny, the government bled $85 million last year on these copper-coated losers. It’s a classic case of government inefficiency begging for a fix.
President Barack Obama once remarked on the penny’s uselessness, and now President Donald Trump has taken the point even further. “For far too long the United States has minted pennies which literally cost us more than 2 cents,” Trump declared on Truth Social. His call to “rip the waste out” of the budget resonated with Americans tired of bureaucratic bloat.
Trump’s not wrong -- pennies are a fiscal black hole. The Treasury’s final order for blank penny templates was placed this month, signaling the end of new coins entering circulation. Once that last batch is minted, the penny’s run is officially over.
But here’s where the plot thickens: businesses will now round cash transactions to the nearest five cents. Non-cash payments can still use exact change, but for cash, nickels will become the new workhorse. Sounds simple, until you realize nickels cost 14 cents each to produce.
“If you get rid of the penny, it will increase the amount of nickels,” warned Rhett Jeppson, former U.S. Mint chief. He’s right -- nickels are pricier to mint, with the Treasury losing $18 million on them last year. Swapping one money-loser for another? That’s Washington math for you.
The shift to nickels could erase the savings from ditching pennies. Increased demand for five-cent coins means more production, and at 14 cents a pop, the losses pile up fast. It’s like trading a paper cut for a stab wound.
States with sales taxes rounded to the nearest cent face another headache. The Treasury’s urging governors to guide businesses on proper tax collection, but that’s easier said than done. Expect confusion at cash registers as merchants navigate this new reality.
Consumers, meanwhile, will feel the pinch -- literally and figuratively. Rounding prices up or down might seem minor, but it could nudge costs higher over time. Progressives might call this “modernizing” the economy; conservatives see it as another hidden tax on the working class.
The penny’s demise has been a rare point of agreement in Washington. Years of bipartisan efforts to kill the coin gained traction under Trump’s push for efficiency. His February Truth Social post demanding the Treasury act was the final nail in the penny’s coffin.
“This is so wasteful!” Trump wrote, slamming penny production as a budget drain. He’s got a point -- $85 million in losses isn’t pocket change. Yet, the nickel problem looms like a storm cloud over this victory.
Jeppson’s warning about nickels deserves more attention. “You lose more on a nickel than you do on a penny,” he told the New York Times. Trading one unprofitable coin for another feels like rearranging deck chairs on the Titanic.
For cash-paying Americans, rounding to the nearest nickel will change how they shop. A $1.99 item might cost $2.00, while a $1.96 item could drop to $1.95. It’s not earth-shattering, but it’s another annoyance in an economy already squeezing wallets.
The Treasury’s banking on nickels to fill the gap, but at what cost? Ramping up production of a coin that loses money faster than the penny defies logic. This is what happens when bureaucrats “solve” problems without thinking two steps ahead.
Trump’s call to cut waste -- “even if it’s a penny at a time” -- is laudable, but the nickel surge could undermine it. Conservatives want lean government, not new ways to bleed cash. Time will tell whether this reform saves dollars or just shifts the burden elsewhere.
