Billionaire entrepreneur Elon Musk’s task force focused on improving government efficiency has set its sights on slashing U.S. government spending, starting with a small yet significant target: the one-cent coin.
For pennies made in the United States, the mint age entails a cost of around 3 cents per penny, which means the inexpensive coin is manufactured and sold for the much lower value of just 1 cent.
It’s costing U.S. taxpayers over 179 million dollars in the 2023 fiscal year just to make the pennies, and that’s because each penny itself ends up costing more than 3 cents to manufacture,” DOGE said. “For the 2023 fiscal year, the U.S. Mint produced over 4.5 billion pennies, which is roughly 40% of the more than 11.4 billion coins they produced for general circulation.
Manufacturing costs for the product are forecast to be reduced by up to 50% or more.
The $179 million associated with the commission’s formation is a relatively tiny amount compared to the goals President Donald Trump has outlined for the organization. As Trump has stated, the group will focus on reducing wasteful government spending and reorganizing federal agencies. In fact, Elon Musk, a member of the team, has said they aim to cut a significant amount, $500 billion, from annual federal spending.
suggesting on social media on January 20th that he will be temporarily halting his campaign to seek the Republican gubernatorial nomination in Ohio.
The DOGE will be officially established as a new department within the executive branch, aiming to enhance the governmental IT infrastructure by improving efficiency and productivity throughout the government.
The penny’s rising cost
Finding out that a single penny, which now costs around 3.7 cents to make and deliver, is quite interesting.
However, I don’t see any text provided from the Federal Reserve Bank of St. Louis. Could you please provide the text you’d like me to paraphrase? I’ll assist you with your request.
Dropping the penny from circulation is an idea with the potential for unintended consequences, such as increased ticket prices due to rounding transactions to amounts ending in 5 cents, according to a 2020 blog post by the Federal Reserve Bank of Richmond.
The text says it’s best not to round a single item or a small-value purchase to pennies, as it might result in a considerable price change.
Canadians ended up paying around $3.27 million in extra dollars at grocery stores every year because prices were rounded up after the change.
On the other hand, the time spent counting pennies to make change could also be a consideration, as the old saying goes: time is money,
The cryptocurrency DOGE might aim higher than the lowly value of a penny, as it’s not the only coin that incurs costs exceeding its worth. According to the U.S. Mint’s 2024 annual report, producing and distributing each nickel costs roughly $0.14.
