President Trump stresses that producing the penny is “wasteful,” given that it costs more to produce than the coin’s face value. The U.S. Mint lost over $85.3 million in the last fiscal year from coining pennies.
President Donald Trump has made a decision that sheds light on the inefficiency of fiat money-based systems. Trump has ordered the U.S. Treasury to stop the production of the one-cent coin, popularly known as the penny, given the losses implied in its coinage.
Trump’s order comes after the Department of Government Efficiency (D.O.G.E.), led by Elon Musk, highlighted the penny’s hidden costs. D.O.G.E. remarked that minting the penny alone cost over $179 million in 2023’s fiscal year, with over 4.5 billion pennies introduced.
On the issue, Trump stated:
For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful! I have instructed my Secretary of the US Treasury to stop producing new pennies. Let’s rip the waste out of our great nations budget, even if it’s a penny at a time.
According to U.S. Mint data, Trump is right: each penny coined had a production cost of $0.037 last year, over three times its face value.
However, analysts are confused about Trump’s ability to end the penny, as Congress is the institution that dictates the size and metal specifications of coins.
Nonetheless, Trump can act differently, not eliminating the penny specification but stopping its mintage. “The Secretary of the Treasury might be able to simply stop the minting of new pennies,” said Robert K. Triest, an economics professor at Northeastern University.
Experts have warned that a similar move might be upon the nickel, which is also produced at a loss compared to its face value ($0.05 to nearly $0.14).
Trump’s move on the penny is part of a series of changes that seek to stop resource misuse and increase the efficiency of the state’s apparatus, spearheaded by Elon Musk’s D.O.G.E oversight of government activities.
Read more: Elon Musk Positions DOGE to Achieve ‘No Inflation’ by 2026 With $4 Billion in Daily Cuts
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