Doc's note: Today, I'm sharing an essay from my good friend and colleague Steve Sjuggerud where he explains why it's time to get rid of the penny...
What's the easiest way to make money in the world? To me, the answer is printing money.
I mean it...
If you print a bill that says "$100" on it (and people accept that it's worth $100), then what's your profit on printing that bill?
What are your costs to produce it? Basically, some green ink and some paper. So your profit on printing a $100 bill should be something darn near, well, $100.
It's the easiest money on earth.
So it's truly stunning to me that our government could somehow manage to lose money in the business that is the easiest way to make money on earth...
I'm specifically talking about the penny – one U.S. cent.
It actually costs our government more than two cents to make a penny. Can you believe it?
For the specifics... In 2018 alone, the U.S. Mint produced more than 8 billion pennies (yes, billion). That's $80 million worth. The problem is, it cost $166 million to make those pennies.
In short, the U.S. government lost more than $85 million in the process of producing $80 million worth of pennies.
Let's get rid of the penny. I'm serious.
Canada got rid of its penny in 2012. And heck, who even noticed? I go to Canada every year... And I hadn't even noticed.
Electronic payments in Canada still account for the penny. But you round to the nearest five cents when using cash. No big deal.
At U.S. military bases overseas, they don't accept pennies. Instead, they round up to the nearest nickel at the base-exchange stores.
Heck, even in the U.S. we got rid of the half-cent in 1857, when it was worth more like 10 cents today due to inflation.
So if we already got rid of the dime (so to speak) in 1857, why stop at the penny today? A nickel costs 7.5 cents to produce. We lose money on them, too.
Between the penny and the nickel, the U.S. government lost $120 million in 2018 alone minting these coins, as the costs exceeded their value.
This idea was actually floated in Congress. Former President Barack Obama was for it. He said, "One of the things you see chronically in government is it's very hard to get rid of things that don't work so that we can then invest in the things that do."
The bill was introduced in 2017. It was read twice and referred to the Senate Committee on Banking, Housing, and Urban Affairs. That's the last we heard of it.
Meanwhile, the U.S. government has lost money every year for the last 13 years producing the penny.
If you agree with me – and you want our country to stop losing $85 million a year minting pennies – then the best you can do is let your representatives in Congress know.
Heck, go straight to the top... Let President Trump know...
He's "Mr. Money," right? Wouldn't it be fitting for Mr. Money to get rid of the penny?
I know that a large number of people disagree with me on this. But it's already working just fine in Canada, and on our overseas bases, among other places.
Most importantly, I can think of a heck of a lot better uses for $85 million than losing it by spending two cents to create something worth one cent.
The U.S. government should be embarrassed about this... and it should want to make the problem disappear. In this case it's incredibly easy to do... Just stop. Stop spending two cents to create something that's worth one cent.