The U.S. Penny Might Be on the Chopping Block—Here’s Why
The days of the U.S. penny may be numbered, as the newly established Department of Government Efficiency (DOGE), led by Elon Musk, has flagged the coin’s rising production costs as a financial drain. The agency’s recent statement highlights an inconvenient truth: it now costs more than three cents to produce a single penny.
With 4.5 billion pennies minted in Fiscal Year 2023 at a taxpayer expense of $179 million, the question arises—does the penny still serve a purpose, or is it time for the U.S. to follow other nations in phasing out its smallest denomination?
Why the Penny Is Under Scrutiny
According to the latest report from the U.S. Mint, it takes about 3.7 cents to produce and distribute one penny in Fiscal Year 2024, marking a 20% increase from the previous year. The primary driver? Rising material costs, particularly zinc and copper.
DOGE took to X (formerly Twitter) to highlight this issue with a quip:
“Penny (or 3 cents!) for your thoughts.”
This is just one of the inefficiencies that Musk’s new agency hopes to address. DOGE, created under an executive order from President Donald Trump, is tasked with streamlining government spending.
The History of the Penny—and Its Declining Relevance
The penny has been in circulation since 1793, making it the first official U.S. coin. Initially made entirely of copper, the penny has evolved over time—both in material and public perception.
In modern America, however, pennies are often seen as an inconvenience rather than a necessity. As character Sam Seaborn famously quipped in a 2001 episode of The West Wing:
“The majority of pennies don’t circulate. They go in jars, sock drawers.”
This sentiment rings true. Many people view pennies as excess change, often discarded or left to accumulate in jars rather than actively used in transactions.
Other Countries Have Moved On
If the U.S. decides to eliminate the penny, it wouldn’t be the first country to do so.
Canada stopped producing one-cent coins in 2012, citing the cost of production and lack of consumer demand.
Australia eliminated its penny back in 1992 without major economic disruption.
Both countries have adopted rounding systems for cash transactions, effectively phasing out their smallest coins without impacting pricing or commerce.
Will the Penny Disappear?
While Elon Musk and DOGE are just beginning their cost-cutting efforts, the U.S. Mint has long been aware of the penny’s inefficiencies. Whether the penny is formally eliminated or production continues despite rising costs remains to be seen.
An Unbiased Perspective
The debate over the penny is a classic case of tradition versus efficiency. On one hand, the penny holds sentimental and historical value, symbolizing the country’s rich numismatic past. On the other, the economic argument for its elimination is compelling—spending three times its face value to produce a coin that many don’t use makes little financial sense.
If the U.S. follows in the footsteps of Canada and Australia, it would likely save millions annually without disrupting daily transactions. However, resistance to change and concerns about pricing adjustments may delay any final decision. One thing is clear—if the penny does disappear, its legacy will remain firmly minted in American history.