The U.S. Mint has faced pressure to reduce the dominance of pennies, as moves to eliminate them have faced resistance from opposition. Here’s a structured summary of the content:
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Introduction and Targets: President Trump has set ambitious goals, such as targeting Greenland and small denominations like pennies. Recent moves, such as Scott Bessent’s call to halt penny production, aim to reduce unnecessary government spending. Bessent emphasized the intention to "remove the waste" from the U.S. government budget, though he later admitted he couldn’t commit to reducing production entirely.
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Financial Cost: Each penny costs approximately 3.69 cents to produce and distribute, though it adds a 2.69-cent loss to transparency. This reflects annual costs of $85.3 million, with pennies contributing to a $1.28 billion deficit.苹:m a 0.5% loss annually, highlighting the significant economic impact.
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Background and Opposition: The penny’s cost has been a contentious issue among experts and government officials for decades. Coins smaller than a penny were stopped in the 20th century, notably Australia’s one- and two-cent coins, which were largely removed due to inflation and production costs. Australia’s stance was framed as environmental and practical inefficiencies rather than logistical barriers.
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Proposals for Elimination: Opponents argue that reducing pennies could raise demands for nickels by inflating sales tax. However, others propose "one-cent sales taxes" on consumers, leveraging the pennies’ lower production costs to enable sales. Despite the potential for savings, the resistance is tied to sentiment and not the arguments themselves.
- Broader Trends and Backlash: Countries like Canada and New Zealand withdrew penny production, influenced by inflation and costs, while Australia focused on environmental and logistical issues. As net spending on coins grows, the demand for fewer denominations becomes more pressing. Public sentiment remains polarized, but political pressure has reshaped discussions around coin denominations.
In summary, while eliminating pennies could save costs, the push to reduce their use is framed by political will and emotional attachments, rather than academic arguments. This raises questions about whether net demand for other coins will suffice given the high growth in coinage production.
