Ever stopped to consider how much money was wasted in the process of making money? I know that sounds a little strange, but I’m sure most people have heard the little anecdotes about how it costs more to make a penny than it’s worth, etc., etc., etc. Have you ever stopped to seriously consider that, or look up the actual numbers?
Well, if you haven’t and you’re interested, I just happened to take a few moments to look them up today. This information is from http://news.coinupdate.com/cost-to-make-penny-nickel-0619/ and is comprised of data sent direct from the US Mint. Quick tip, Seigniorage is the difference in cost of manufacturing the coin (cost of the process + cost of the raw materials used) from the actual value of the minted coin. So a negative number is a loss.
Historical Cost of Producing and Distributing the Penny
Fiscal Year US Mint Cost Seigniorage
2010 0.0179 -$ 27,400,000
2009 0.0162 -$ 19,800,000
2008 0.0142 -$ 22,200,000
2007 0.0167 -$ 40,100,000
2006 0.0121 -$ 18,300,000
2005 0.0097 $ 2,000,000
2004 0.0093 $ 4,600,000
2003 0.0098 $ 1,000,000
2002 0.0089 $ 8,800,000
2001 0.0080 $ 24,600,000
Historical Cost of Producing and Distributing the Nickel
Fiscal Year US Mint Cost Seigniorage
2010 0.0922 -$ 15,200,000
2009 0.0603 -$ 2,200,000
2008 0.0883 -$ 24,800,000
2007 0.0953 -$ 58,500,000
2006 0.0597 -$ 14,600,000
2005 0.0484 $ 2,400,000
2004 0.0456 $ 6,100,000
2003 0.0378 $ 8,900,000
2002 0.0332 $ 21,900,000
2001 0.0331 $ 28,200,000
Looking at the numbers, it’s very plain that in the last decade, it has gotten exponentially more expensive to mint coins in such small denominations. Compared to the quarter, which costs only $0.10 to make, and the dime, small as it is, that costs roughly $0.04. Anyone with a brain stem that’s partially functional can see this is a huge waste of money, but nobody seems to think twice. Of course, we need these coins, right?
Wrong. Why do we need pennies or nickels either one? The only reason we need them now is because all of our prices are printed in 1/100 of a dollar (that’s a penny, for all you non-math wizards out there). Why don’t we cut the BS, and save some money here. Stop making pennies, nickels, quarters and dollar bills. Dimes would be our new smallest coin. So all prices would be $1.9 instead of $1.89 or $1.99. Most things you buy would go up a penny, or possibly a nickel, to account for the new rounding. Big deal. So would your paycheck. So we would have dimes for the small change, then fifty cent pieces, followed by dollar coins, and maybe even a two dollar coin like Canada is so fond of. If not a two dollar coin, then maybe we’d add something between the dime and fifty cent piece. Like a thirty cent coin. We could even kill off the five dollar bill and replace that with a coin.
Why get rid of quarters and dollar bills? Well, for one, quarters are worth 25 cents, and if we’re going to rounding to tents, that extra five cents would get in the way. for dollar bills, I’d kill them off because they have to be replaced about 100 times for every time a dollar coin needs to be replaced. Same reasoning for the five dollar bill, if we wanted to do that.
The end result would be a US Mint that actually produced money for less than face value of the money, saving millions of dollars a year in production and replacement costs for our dollars and cents, and that just makes sense.
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