Paging the Canadian Mint…

Perhaps the US Mint should be calling the Royal Canadian Mint for advice.

The last Canadian penny was minted on Friday. It’s being discontinued mainly because of cost. It actually cost 1.6 cents to make each penny, and given that pennies are rarely used by consumers it wasn’t deemed worthwhile to keep losing money making something that has become virtually obsolete.

Meanwhile, according to Wikipedia it costs 2.4 cents to produce each American penny. There has been talk of retiring it as well, but it doesn’t really seem to be on the horizon. If the US government doesn’t ditch the penny they should at least talk to the Canadian mint to find out how to reduce costs by .8 cents (or 33%) per coin.

If this site is correct and a minimum of roughly 7 billion pennies are minted in the US each year (that’s a conservative estimate) reducing the cost of producing each coin by .8 cents would save about $56 million per year. That’s not the savings for getting rid of the one cent coin- that’s the savings from producing it as efficiently as Canada did.

One comment

  1. ernestwhile

    Pennies don’t need to be discontinued, they just need to be revalued as nickels. And then stop producing nickels, which cost about 11 cents.

    If pennies become nickels, you have a 100% profit on their minting instead of a 150% loss.
    If there are 7 billion pennies in circulation ($70 million), you would immediately get a $280 million stimulus to the economy without having to lift a finger or print any new money. Inflation would not be a factor, because you’re still talking coins… very small, comparatively heavy instruments. $1.50 in pennies weighs about a pound.

    Thirty pounds of pennies is worth $45, assuming you can carry them to the bank you could exchange them for $180! But who would do that? Yep, poor people, the demographic that is most likely to spend that $180 on economy-stimulating goods and activities.

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