WASHINGTON: Elon Musk’s Department of Government Efficiency (DOGE) proposes eliminating the US penny to reduce production costs.
A post on X stated that pennies cost over 3 cents to produce, burdening taxpayers with $179 million in 2023.
Rising Costs of Producing the Penny
The US Mint produced 4.5 billion pennies in 2023, representing 40% of all circulating coins that year.
In fiscal year 2024, reports show the penny now costs 3.7 cents to make due to rising metal prices.
Zinc and copper price increases are major factors in the escalating costs of producing and distributing the coin.
Calls for Elimination Aren’t New
Advocates have urged penny elimination for years, citing its inefficiency and declining usage as physical change.
During the pandemic, more consumers opted for online shopping and digital payments, further reducing cash transactions.
In a 2001 “The West Wing” episode, a character ridiculed the penny for its lack of practical use.
Arguments for Abolishing the Penny
Experts argue ditching the penny could enhance business efficiency and speed up cash transactions significantly.
Jeff Lenard, a convenience store industry leader, highlighted time saved if clerks skip handling pennies.
“With 52 million cash transactions daily, saving 2 seconds each totals 1,203 days of added productivity annually.”
A Symbol of Systemic Inefficiency
A recent article in The New York Times Magazine labeled the penny an outdated relic of deeper governmental inefficiency.
Despite widespread agreement on its inefficiency, political and public resistance have delayed efforts to retire the coin.
Musk’s Growing Role in Efficiency Initiatives
The newly established Department of Government Efficiency was created this week via an executive action by President Trump.
Originally co-led by Musk and Vivek Ramaswamy, reports suggest Ramaswamy was recently removed from the initiative.
Debates on Practical and Cultural Implications
Critics point out possible public backlash, given the penny’s symbolic connection to Abraham Lincoln and traditional currency.
Supporters believe eliminating the penny aligns with modern payment trends and could signify progress in government policy.
The Future of the Penny
For now, the debate continues, with Musk spearheading discussions about the penny’s financial burden and societal relevance.
Whether this latest push gains traction or stalls like prior efforts remains to be seen.
