Et tu, nickels?

I’ve blogged a few times before about pennies and the effort some people have made to eliminate them. Now it looks like we may need to add the nickel to the endangered coin list.

The U.S. Mint has some good news and bad news in its latest biennial report to Congress. The good news is that we’re wasting less money on pennies and nickels. The bad news is we’re still wasting money on pennies and nickels.

Production costs for all four major coin types fell in fiscal year 2014 due to the falling price of copper, one of the primary metals used to make coins. The Mint estimates it saved $29 million this year compared to last year on account of lower copper prices.

But it continues to lose money on pennies and nickels. It now costs $1.62 to make a dollar’s worth of nickels, and $1.66 to make a dollar’s worth of pennies. By contrast it costs only 36 cents to make a dollar’s worth of quarters, and 40 cents for a buck of dimes. Paper dollar bills are even more cost-effective.

As recently as the early 2000s, the Mint was still turning a small profit on the nickels and pennies it produced. But the costs of those coins spiked in 2006, and haven’t broken even since then.

As of 2013 taxpayers were losing $105 million annually on penny and nickel production. This report doesn’t include total production numbers, so we can’t calculate costs at the moment. But it’s safe to assume that losses on pennies and nickels decreased this year, in line with their falling cost.

As is the Wonkblog way, there are charts to illustrate each of those points above, so click over and take a look. The author suggests that eliminating the penny and nickel could save $100 million annually, but as you know I’m not a big fan of killing off coins. An option that may be less objectionable would be to revalue each coin so that it is now worth ten times its face amount – the penny goes to ten cents in value, the nickel becomes like the half dollar, and so forth. It would make these coins cost effective again, and would produce a modest boost to the economy, which of course means that there’s a greater chance I’ll dance the lead in Swan Lake at the National Ballet before that happens. Just by talking about it we could make Ted Cruz’s head explode. Anyway, while there does’t seem to be much chatter for eliminating the nickel, certainly not at the same level as the penny-killers, at these prices it’s just a matter of time.

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