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New year, old cent arguments

Out with the old, in with the new?

That is the usual sentiment on New Year’s Eve.

Does it apply to the U.S. cent?

Former Mint Director Philip Diehl says  the old cent should be abolished in an interview posted on CNBC financial news yesterday.

Mark Weller of Americans for Common Cents says no, keep the coin.

These battle lines have been drawn for decades. We still have the cent.

Why shouldn’t 2016 be ushered in with the usual stalemate?

The cent has cost more to make than its face value for 10 years now. The figure cited is 1.8 cents each.

The metallic value of the cent, the cost of the zinc and the copper that goes into the coin, is now down to .4195 cents, according to www.coinflation.com.

It might seem strange the Mint can’t make money on a cent that is worth less than half of face value in metal costs, but there is the little matter of the overhead factored into each coin.

Nearly 60 percent of Mint coin output is cents, so that percentage of building maintenance costs, press time, wages and handling costs are attributable to the lowly denomination.

However, the number of cents being produced is rising. This spreads those overhead costs around more coins.

In 2011, 4.9 billion cents were struck. In the first 11 months of 2015, the figure is 8.9 billion.

This 81 percent increase has an effect on the cost of overhead attributable to each coin.

In 2014, cent output was 8.1 billion pieces. So with an output gain of at least 9 percent over the past year, the Mint should be able to claim some additional per coin cost reductions. But it will still cost more than face value to make.

But numbers have not carried any weight in the debate over the future of the cent.

Rounding arguments, inflation arguments, emotional attachment arguments have carried the day.

The CNBC story even polls readers who care to respond.

When I checked 3,322 individuals had participated.

Three-quarters of these participants said abolish the cent.

Twenty-one percent said no to the idea and 4 percent said they are not sure.

With all of the changes to America’s payments system in recent years, that 4 percent might not have ever used a one-cent coin.

That’s something to think about.

Buzz blogger Dave Harper has twice won the Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper “Numismatic News.”

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One Response to New year, old cent arguments

  1. Tom D in SC says:

    So abolishing the cent will reduce facilities cost by 60 percent? What does that mean? The condition of the plumbing and electrical systems will require less work because the penny isn’t being produced? The Ming can reduce the amount of work the cleaning lady has to do because they don’t make cent coins anymore? Gee, we can lay off the technicians who keep that pesky penny press running and make a couple bucks by selling off the press to the area junk man. It will free up space on the floor to put in another press to make more of those coins that are profitable so the mint can gouge us a little bit more. Maybe the Mint can make a bunch of cartoon token coins like the Canadian Mint in that extra space. How much of the federal budget can be reduced by not making the penny? Will the citizens get a tax rebate?
    This is all a load of horse pucky. What will really happen is nothing. The penny circulation will stop and any savings will be absorbed by the government and the facilities will continue to age and require more maintenance technicians to keep them up. The penny killers will then put their sights on the nickel then the dime, then the paper dollar, yatta, yatta, yatta.
    The government is all the time shifting money from one account to another to get what they want. I’m sure the Mint is profitable enough to be able to absorb the extra 0.8 cents. We as citizens get nothing if the cent is abolished. If the mint shows a profit, the government will shift that money to something else (like they did with Social Security) and life goes on. When the United States goes into Chapter 11 because they spend more than they have and the debt was called in, I don’t think they can credibility point to the cent and say this wouldn’t have happened if we could have abolished the cent.

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