Inflation is now coming for . . . YOUR THOUGHTS.
You know how some people say, “A penny for your thoughts”? Well, they may have to change that to, “A nickel for your thoughts” . . . because it sounds like the government is moving toward KILLING THE PENNY.
President Trump says he has directed the Treasury Department to stop minting new pennies . . . because they cost more than a penny to produce.
Quote, “For far too long the United States has minted pennies which literally cost us more than TWO cents. This is so wasteful! Let’s rip the waste out of our great nations budget, even if it’s a penny at a time.”
That is true. According to the U.S. Mint, each penny actually costs 3.7 cents to make. But like a lot of things, the situation is more nuanced than that.
There are two problems with moving away from pennies:
1. Experts say this would cause us to need more NICKELS, which we’re also losing money on. According to the Mint, each nickel costs 13.8 cents to make.
2. Analysts say this will cause prices to rise for consumers. If the penny is phased out, prices would just be rounded up or down to a five-cent amount. And let’s be honest, they’re probably going to be bumped UP in most cases.
Canada stopped minting its one-cent coin in 2012. And in 2018, an economic analysis found that Canadians paid about $3.27 million MORE at grocery stores each year, due to prices being rounded higher after the change.
That said, there are also problems with the alternatives: Pushing toward a cashless society . . . and continuing with the status quo.
One reason that the government has to make so many pennies every year is a large percentage of them don’t remain in circulation. People don’t value them . . . so they get stashed in junk drawers at home . . . or they fall on the ground and people don’t even bother to pick them up.
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