Vahe H. Apelian
"“Penny has its honored place in our language and American culture. A penny left on the headstone lets the deceased soldier's family know that someone stopped by to pay their respect. There are so many sayings referencing penny."
I read today that “President Donald Trump’s Department of Government Efficiency is looking into stopping production of the penny to save taxpayers money. In a post on X Tuesday night, the Elon Musk-run group pointed out that a penny now cost three cents to make – triple its value. The cost of taxpayers a whopping $170 million in. a fiscal year 2023 the post said.” It is ut not the first time that phasing out the lowly penny was considered but without such fanfare.
Several years ago, I wrote a blog about seigniorage, which according to Wikipedia, is the “the profit made by a government by issuing currency, especially the difference between the face value of coins and their production costs.” Yes, not all currencies make a profit to the government, but most do.
According to a report in Coinnews.net, dated February 7, 2020 by Mike Unser, “in FY 2019 the price of producing U.S. coins for circulation climbed again last year, the U.S. Mint disclosed in its 2019 report…..in FY 2019 the to make, administer and distribute the 1-cent coin eased to 1.99 cents form 2.06 cents.” The cost to print a penny apparently is now 3 cents
There is also no profit from seigniorage of 5-cents. But the same report noted that the U.S. Mint realized $138.8 million for minting the dime and $285.2 million form minting the quarter. It turns out that the U.S. Mint transfers seigniorage, that is to say the profit it makes, to a Treasury General Fund that helps finance the national debt. I wonder if the same fund subsidizes the mining of the penny. FY is the acronym for fiscal year.
Other interesting tid-bits about the penny:
- Lincoln cents are composed of 2.5% copper. The rest is zinc.
- Pennies have an estimated 25-year life span.
- Coistar, the green-and-white coin collecting kiosk in supermarkets has processed18.5 million pennies in 2015.
Obviously the cost of minting penny varies depending on the cost of the metals involved. Copper is pretty much sought metal. Along with the cost, there is also the impact on the environment. No wonder, our northern neighbor Canada ceased minting penny in 2019. Bills have been introduced in the U.S. congress to phase out minting the costly penny but to no avail thus far, primarily for sentimental reasons. The penny is very much American. It is hard to imagine America without its penny.
Let us face it. The “lowly penny” evokes tender sentiments. I bet many of us have picked a penny somewhere and have set aside pennies in a jar. I have. Penny has its honored place in our language and American culture. A penny left on the headstone lets the deceased soldier's family know that someone stopped by to pay their respect. There are so many sayings referencing penny, such as “penny saved is penny earned”, “penny-wise, dollar-foolish”, and many, many and many more. But, tt appears that the costly penny may not remain with us in the foreseeable future.
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Learning about seigniorage, I was remined of the fate of the early 50 Lebanese piasters, i.e. the Lebanese “50-cents”. Sometimes in the 1960’s the 50 piasters disappeared from circulation in Lebanon. It turned out that tis silver content was for more valuable than its trading face value. Surely there remained 50 piasters already in circulation.
Lebanon being Lebanon, it would not surprise me a bit if those in the higher up bought all the available piasters from the banks at their face value and had them processed for their silver content. It even would not surprise me, Lebanese officials being Lebanese officials, had the government continue on minting the silver containing piasters while they hoarded the mint, until the government ran out of its silver stock and legislation was passed to have its composition changed to what it is now.
After the news, or should I say after the rumors became widely known, I too kept the few silver-containing 50 piasters I laid my hands on. They surely felt different in the pocket. They were heavier than the 50 piasters that replaced them.
I do not know what happened to my few silver-containing 50 piasters. Recently I checked on line about them and found out that they are available for purchase by those interested, especially for those to whom the silver-containing 50 piasters evoke memories of the bygone days in Lebanon. It turns out that in good condition each is retailed up to $38 U.S. dollars.
The 50 Lebanese piasters are now worthless and are not minted any longer. There as a time when a 50-piaster coin is all you needed to secure a seating in the circulating taxicabs in the city or have a tasty manaesh from the baker across the American University of Beirut.
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As to the costly penny, let us be mindful that the U.S. government makes a lot of money by minting the dime and the quarter. I mean the U.S. government gets a hefty return. I mean to say old fashioned profit, by selling the goods way more than its costs. I wonde, have the profits made there, trickled down to the taxpayers, that phasing out the minting the costly penny will?
As far as the penny is concerned, hoard your pennies and pass them to your grandchildren. But do not expect to see your taxes getting lower once the Trump administration conquers the lowly penny and removes it from the face of the earth..
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