What the end of the penny means for the economy, your piggy bank and the way America prices items
Talk to end the penny’s production has been bandied about for decades among government officials and economists.
Talk to end the penny’s production has been bandied about for decades among government officials and economists. However, the talk became policy when, over the weekend, President Donald Trump ordered the Treasury to stop minting new pennies.
“For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” Trump wrote in a post Sunday night on his Truth Social site. “I have instructed my Secretary of the US Treasury to stop producing new pennies.”
Trump’s attack on the penny came after Elon Musk’s DOGE already had targeted the coin for elimination. Among all the contentious battles that the Trump administration and Musk find themselves in over government spending, this is one that most economists and others in the monetary ecosystem seem nonplussed about.
According to the Federal Reserve, there are 114 billion pennies in circulation, or $1.14 billion, or 0.006% of the money in circulation. It costs $192 million a year to produce pennies, about 4% of the Mint’s operating budget but only 0.00003% of the U.S. federal budget. This expense makes the penny expendable, according to economists.
David Gulley, an economics professor at Bentley University, said the estimated cost of making a penny, at around three cents, is an economic burden, “because millions vanish under couch cushions each year, the U.S. Mint must produce a steady stream of replacements.”
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