In a drastic move to reduce government expenditure, former President Donald Trump has instructed the U.S. Treasury Department to discontinue the production of pennies, one of the smallest U.S. currency coins. The move, announced last week, is part of a broader initiative to make federal operations more efficient and respond to growing concerns about rising production costs and issues with the coin system.
The penny, which has been the subject of controversy for decades because it does not purchase much, is once again the topic of debate over the future of American currency. The move is a significant shift in U.S. currency policy and raises questions about whether or not we should continue to use the penny in an increasingly evolving economy.
Rising Penny Production Costs
One of the key reasons Trump directed an end to the production of the penny is the increasing cost of producing the coin. Based on the U.S. Mint, it currently costs 1.76 cents to produce one penny, well more than it is worth. The high expenses are primarily fueled by the increasing cost of zinc, the primary metal in the penny, along with labor and shipping expenses.
The production of pennies has been the subject of controversy for decades, with many arguing they squander taxpayer dollars. Over the past decade, a number of studies have indicated that pennies do little for the economy and are regularly discarded by consumers or left untouched in pockets. Trump’s directive to discontinue producing them is anticipated to save the U.S. government millions of dollars annually, potentially freeing the money up for more pressing uses.
Supporters of the Move
Trump’s move to suspend the production of pennies has been welcomed by most economic analysts and fiscal conservatives who argue that the penny is no longer necessary in today’s economy. Its proponents argue that the phasing out of the penny would simplify cash transactions, save on production, and make the U.S. Mint more efficient.
Most business executives and economists have also weighed in, arguing that the low denomination of the penny makes it cumbersome for consumers and merchants. Sometimes, the penny adds unnecessary cost and time to transactions, especially when rounding to the nearest five cents would simplify cash transactions.
- Cost Savings: Suspending penny production will save the government millions of dollars annually.
- Increased Efficiency: This move could simplify financial transactions and decrease hassles for consumers.
Opposition to the Decision
Trump’s move, however, has been opposed by those who oppose the phasing out of the penny. Some individuals argue that this move could harm some communities, particularly those in rural areas where cash transactions are more prevalent. Some individuals argue that the penny is valuable as a symbol of American culture and history, and others argue that its phasing out could pave the way for the phasing out of other coins that are low in value.
To address these issues, the Treasury Department has reassured the public that any future modifications to the currency system will be done carefully, taking into consideration how they could impact all segments of society. The department also emphasized that the government would devise alternative measures to ensure that rounding practices would be fair to all.
What’s Next for the U.S. Currency?
Trump’s executive order is already beginning to have an effect, and the Treasury will start to reverse penny production in the months ahead. Meanwhile, debate about the future of U.S. currency is going to only become more intense as the nation grapples with what an increasingly digital economy means and how U.S. coins and currency might change.
Although the future of the penny is now determined, debate about its usefulness in the world today is hardly at an end. As the U.S. Mint moves on the new directive, individuals and businesses will be forced to adjust to a world without the iconic copper penny.
