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Nickel and Dimed
 By Tom Shoop | Tuesday, April 01, 2008  |  06:17 PM

In a recent New Yorker piece, David Owen resurrected the issue of why the United States persists in minting and using pennies. It's common knowledge that it costs the U.S. Mint more to make a penny (1.7 cents) than it's worth. But one problem with eliminating the annoying low-denomination coins would boost our reliance on nickels -- and those cost almost 10 cents to manufacture.

A couple of other factoids from Owen's piece:


  • "The U.S. Mint took more than two years to manufacture its first million coins; the Philadelphia Mint now makes that many every forty-five minutes or so."

  • "One of the biggest challenges of coin design is portraying realistic-looking three-dimensional facial features on a metal surface that is nearly flat. This difficulty explains why the faces on coins are almost always shown in profile: doing so keeps noses recognizable. The 2006 nickel, which features a likeness of Jefferson ... is the first circulating U.S. coin to have a forward-facing portrait; it is considered by coin aficionados to be an engraving tour de force."



Comments


I agree we definitely should eliminate pennies and nickels from our currency system. As a matter of fact, if we all carried some form of tender card, it would reduce costs and increase efficiencies. I also concur with Ed Dayton about us buying too much from China, people wake up, support your own country. We all work hard, so keep our money here, DO NOT BUY CHINESE PRODUCTS!!!

Ed Forge  | Wednesday, April 09, 2008 |  07:25 AM


Overseas the military does not use pennies however they don't charge everything by the nickel either. They just round to the nearest nickel with it rounded up at 3 cents and down at 8 cents. Overall, you balance out and not one penny is used.

Boof  | Sunday, April 06, 2008 |  04:24 PM


People, people. Americans need to get more common sense. Has the Mint looked at other countries? In Europe, Germany always had a 2 Pfennig coin, the Euro now has a 2 cent coin. Even with notes, there was a DM200 and now a E200 note. In the US, the dollar bill is over the hill, JUST STOP PRODUCING IT, and people will have to use $1 coins. With the penny, introduce a 2 penny coin and stop making the penny! US consumers will just be scammed max 1 cent per transaction, and the Mint's costs will go down. A win-win situation for all, if only the politician's would smarten up and do their job!

dernhbayer  | Thursday, April 03, 2008 |  08:02 AM


When a bank or brokerage house gets a penny deposit they get to loan out around 30 cents. So isn't a penny really worth around 30 cents on Wall Street?

OK  | Wednesday, April 02, 2008 |  03:59 PM


Absurd saying that nickels which cost a dime to make weould make coinage more expensive if the penny weas eliminated.

Revamp all coinage. Eliminate pennies and nickles.
lowest denomination a copper/zinc (pennylike) dime

Eliminate the quarter.

Smaller 50 cent pieces, a new dollar coin and a new $5.00 coin

Eliminate the $1, $2 and $5 bills.


The goverment would save a great deal, and our currency would line up more correctly with purchasing power eroded since the 1800's elimination of the 1/2 cent coin.

wdl  | Wednesday, April 02, 2008 |  02:43 PM


The main thing that pennies are good for is local and state sales taxes. If the penny is eliminated, local and state taxing officials will find a way to increase their sales taxes to the next highest nickle. That's what the politicians will do in Colorado!

Taxed in Colorado  | Wednesday, April 02, 2008 |  09:45 AM


Let's get rid of nickels, too, and make the dime the minimum unit of currency. It's past time.

Bruce Bender  | Wednesday, April 02, 2008 |  09:38 AM


Get rid of the nickels, too. A dime today is probably worth what a penny was worth a hundred years ago. Postage stamp rates could still be set a 5 cent increments; you'd just have to buy at least two at a time. (I believe 1/2-cent stamps existed at one time.) A system of legal tender using dimes, fifty-cent pieces, one-dollar coins, and five-dollar coins would be a great improvement. The smallest bill would be a ten. It would save a lot of money not only in the mint, but commerce would probably benefit in general. Of course, we'd still have to use decimals in our accounting. Maybe in another hundred years we can look forward to the dollar being the lowest necessary monetary denomination. Then the decimal accounting would go, too!

-- Jed  | Wednesday, April 02, 2008 |  08:47 AM


I am sure we could have our Penny minted in China for less than a Penny in cost. In addition that is where all our nonferrous scrap metals are going, the metals stolen out of vacant repossessed homes and buildings. In addition, our stupid Americans love the cheep Chinese products.

Ed Dayton  | Wednesday, April 02, 2008 |  08:18 AM


I expect this from the NY Times, but I guess I just expect more from GovExec.... Do people throw a nickel away after using it once? No! They pass it on to someone else who also thinks it's worth five cents and who will pass it on again in the near future. Let's stop persisting in this idea that we somehow "lose" five cents every time a nickel is manufactured. Likewise, a penny isn't worth "one cent" once it's been released into the economy, it goes through so many pockets, it turns out to have been worth much much more by the time it leaves circulation.

Happy Fed  | Wednesday, April 02, 2008 |  07:41 AM



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Government Executive Editor Tom Shoop takes a look at news and events affecting the federal bureaucracy, from the perspective of a longtime observer of government.

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