President Donald Trump is now setting his sights on the penny. Reportedly, Trump has directed the Treasury Department to stop minting new pennies, citing the rising cost of producing the one-cent coin.
“For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” Trump wrote in a post Sunday night on his social media platform Truth Social as he was departing New Orleans after watching the first half of the Super Bowl.
READ: Donald Trump declares ‘TikTok is back’ ahead of inauguration (January 20, 2025)
“I have instructed my Secretary of the U.S. Treasury to stop producing new pennies,” the post said.
The decision comes as the cost-cutting initiative Department of Government Efficiency (DOGE), spearheaded by Elon Musk, highlighted the cost of making a penny in a post on X in January 2025.
If the U.S. were to stop producing pennies, the decision would likely have a mix of economic, logistical, and social impacts.
Economic impact of discontinuing penny production
The U.S. Treasury currently loses more than a penny to produce a single penny, as it costs about two cents to mint each one. Stopping production would save taxpayers millions of dollars annually. However, the overall savings might be minimal in the context of the federal budget, but it would still be a positive step towards reducing waste and inefficiency. Additionally, businesses and consumers would likely adjust to the absence of pennies by rounding cash transactions to the nearest five cents. This rounding would simplify transactions, reduce the handling of small change, and potentially reduce costs for businesses in terms of time and effort spent dealing with pennies.
Public response
Despite these savings, the discontinuation of pennies could face public resistance. Pennies have been part of U.S. currency for over 200 years, and many people are accustomed to using them. The loss of pennies could be viewed as a loss of tradition or as an inconvenience for those who frequently use them. For instance, some people still collect pennies, or they might rely on them for small purchases, particularly in low-income communities.
Impact on charities and collectors
Charitable organizations, many of which depend on small change donations, would also feel the absence of pennies. Some might find it difficult to adapt to new methods of collecting small amounts, and this could impact fundraising efforts. Additionally, collectors of pennies and numismatics enthusiasts might also mourn their discontinuation, as certain penny designs and historical coins can hold value in the collector’s market.
READ: TikTok might ‘go dark’ on Jan. 19, Supreme Court likely to uphold app ban (January 11, 2025)
Rounding and inflation
Rounding cash transactions might lead to minor inflationary effects, as prices could be rounded up or down, but the overall effect would likely be negligible.
Stopping penny production could streamline the economy, save resources, and simplify transactions, but it would not come without some challenges, including public resistance and potential impacts on small-scale charities.