The Frivolous American Penny: Why Mints Continue Production Despite Exorbitant Costs

It may seem absurd that a coin worth just one cent in value can cost up to three cents to produce. Nevertheless, the United States continues to mint these pennies despite the financial strain they impose. This article delves into the reasons behind this ongoing practice, the role of Congress, and the potential solutions that could resolve this issue.

Why Pennies Continue to Be Minted

The United States Mint currently reports that it costs approximately 3.1 cents to produce each penny. This significant cost of production far exceeds their nominal value, making the question of why they are still minted all the more pressing. The continuation of penny production is largely due to two primary factors: the ongoing authorization of the coin and the continued demand from the Federal Reserve.

The penny is an authorized coin in the United States, and its design and production are under the authority of the United States Mint. The Federal Reserve, which is responsible for ensuring the supply of circulating currency, continues to order these pennies. As a result, the monetary system remains intact and functional, facilitating transactions and commerce across the nation.

The Role of Congress and the Federal Reserve

Any cessation of penny production would require the involvement of Congress or the Federal Reserve. Congress has the authority to deauthorize the continued minting of pennies, effectively removing them from circulation. However, it is challenging to persuade Congress to take action given the influence of industries that benefit from the continued production of pennies, such as the zinc industry.

The Federal Reserve, on the other hand, is responsible for maintaining the supply of currency as requested by the banks and commerce. If a shortage of pennies arises, the Fed would order more to ensure that there is always a supply available. The decision to stop ordering pennies would require a firm stance and a willingness to accept the financial losses associated with the discontinued production.

Possible Solutions

There are two potential solutions to this issue. The first is a legislative action, where Congress deauthorizes pennies. The second is a financial decision by the Federal Reserve to stop ordering them. Implementing either of these solutions within a year could help address the problem, as the market would adjust to the reduced supply of pennies.

The Grammatical Structures of the Phrase

The phrase 'more to produce than they are worth' can be expressed in different grammatical forms, all of which are accepted. These variations include:

More than they are worth: A clause with a verb. More than they're worth: An abbreviation of the clause. More than their worth: A phrase containing a pronoun instead of a clause.

Each version conveys a slightly different meaning. 'More than they're worth' uses 'they're' as a contraction of 'they are,' indicating a comparison based on the value of the coins. 'More than their worth' uses 'their' as a possessive adjective, signifying that the reference is to the intrinsic value of the pennies.

Regardless of the grammatical structure, both options are grammatically correct. However, in everyday speech, the more common usage is 'more than they're worth,' as it is easier to pronounce and understand. This version aligns with the natural way we express the value of an item or a situation.

Conclusion

The continued production of pennies in the United States, despite the high cost of production, is a complex issue influenced by both legislative and financial factors. While the idea of an exorbitantly expensive penny may seem illogical, the stability of the monetary system and the influence of various industries make it challenging to implement solutions. By understanding the reasons behind this practice and exploring potential solutions, we can work towards a more efficient and sustainable monetary system.