August 30, 2019
We open today with a small bit of housekeeping…
This Monday, September 2, our offices will be closed for Labor Day. We’ll return to our regular daily publishing schedule on Tuesday, September 3.
After a heated G-7 conference, escalating conflict in Europe and Asia, and what feels like a never-ending cycle of recession doom and gloom, we certainly welcome the break. And we hope you’re able to enjoy the holiday and make the most of the long weekend, too.
To kick things off American Consequences style, today we’re sharing a surprisingly controversial essay from featured contributor and “Mr. Melt Up” himself, Dr. Steve Sjuggerud.
As someone who rarely carries cash, I think he makes a good point. But based on the e-mails Steve has received so far, not everyone agrees…
Let us know what you think at [email protected].
It’s Time to Kill the Penny
By Steve Sjuggerud
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 today. We lose money on them, too.
Between the penny and the nickel, the U.S. government lost $120 million in 2018 alone in 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.”
This 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 from 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.
Now here are some of the headlines we’re reading…
In 1893, during a nationwide economic recession, George Pullman laid off hundreds of employees and cut wages for many of the remaining workers at his namesake railroad sleeping car company by some 30 percent. Meanwhile, he refused to lower rents or store prices in Pullman, Illinois, the company town south of Chicago where many of his employees lived.
The pound’s steady decline underscores the shifting fortunes of Britain itself and its diminished place in a global economy dominated by the United States and, increasingly, China. How much further can it fall?
Unfortunately for candidates who melt in the campaign sun, in presidential contests, TV ads become less effective closer to the election. Increasingly, voters see candidates directly, through the burning-hot lens of the omnipresent news media and the intense magnifying glass of social media. In short, Biden can run and hide, but not to election day.
Have a great weekend,
Assistant Editor, American Consequences
With P.J. O’Rourke and the Editorial Staff
August 30, 2019