A penny (and a nickel) for your thoughts

President Donald Trump has instructed the US Treasury to stop minting pennies. A nickel could be next. How about the dime?

There once was a watermelon farmer from eastern North Carolina who had a huge truck, delivering the sweet treats to the State Farmers Market in Raleigh once a week during the summer season. He priced the melons at $1.00 each and quickly sold them all.

The farmer did this for the entirety of the season, but when he put pen to paper, he discovered he was losing money, about $1.00 per watermelon. It cost him $2.00 to produce, transport, and sell. No profit, he discovered.

Somewhere along in his study (or lack thereof) of basic business principles, he was taught the sometimes misleading doctrine of increasing volume to make up for his losses.

So, after more and careful study, he came up with a way to reduce his deficit. He bought a second truck, selling the additional watermelons for, you guessed it, $1.00 each. Volume wasn’t the answer, obviously.

Not sure why this story has anything to do with the rest of what I write today, but it might, especially in this day of rapid fire gutting of our federal government by Elon Musk and his partner Donald Trump. Or is it the other way around.

As Air Force One was making its way last Sunday evening from New Orleans to Washington DC, carrying President Trump and others who with him had attended the Super Bowl, only the first half after which the Philadelphia Eagles held a 24-0 lead over the Kansas City Chiefs, the President told reporters that he has instructed the US Treasury to stop minting (making) pennies which would save millions of dollars.

Before any more long sentences and further explanation, let’s take this for what it is. This is not a power-grab by Trump who might know it takes Congressional action to do away with the penny. But he can instruct the Treasury Secretary to halt the minting of pennies or nickels or any other currency.

So, what happens when the supply of pennies runs dry? These things don’t just disintegrate. People horde them, stashing the small loose change in boxes and jars. If you start circulating a billion of the copper plates zinc orbs, there will still be a billion pennies years later, but hidden from public use for some add reasons.

Anyway, Trump, with his King-like decrees such as this one about minting of pennies, is appealing to those who voted for him with ideas that could actually save money but doing so without working through the channels of government such as his other partner in crime, the Republican controlled Congress: the Senate and House of Representatives.

What he’s doing in the early days of his administration through executive orders and self-inflicted positioning is nickel and diming (pun intended) the United States electorate with his desires. Next up will be his ignoring of the court system, especially when a Democrat judge rules against him.

Just wait, watch, and listen. Can’t you hear him tell the judge, “Up your nose with a rubber hose. I’m going to do it anyway and you can’t stop me.”

Saving money has been a quick crusade for Trump—sworn in as President less than a month ago—who says most of his actions have to do with common sense and ideas from Trump’s richest-man-in-the-world-buddy Musk and his crusade-like march through US Government agencies looking for ways to tighten financial belts, down-sizing agencies, cutting fat that Congress has put there year-after-year-after-year.

Interesting that Republican lawmakers are now yelling about proposed cuts being made (though stopped momentarily by a judge) in National Institutes of Health spending. They want cuts but not in their backyard, not in their state or district for fear of losing votes when their term comes up for re-election.

From a story on the website NOTUS (click for the entire story):

North Carolina Senator Ted Budd, a Trump loyalist, likewise expressed discomfort with the cap on Monday. Budd said his office has been reaching out to the administration with its concerns but declined to comment further. North Carolina’s Research Triangle is the largest research park in the country, with over $2 billion in NIH funding going to the state.

As the Czar (“That’s a beautiful title,” Trump may have said over the past month—though we’re not so sure he did but if we say it enough Trump will believe he said it—of the Department of Government Efficiency (DOGE)—I pronounce it DOG-E (as in Dog and Pony Show)—Musk, of Tesla and Space-X, both subsidized by the United States Government through tax breaks and over-priced contracts, has been able to invade government agencies (Musk has Top Secret clearance because of Space-X) with a small staff of computer literate 24-year old geeks to rampage through systems to find fat whether it’s there or not and cut staff and programs.

Ignoring Congress seems to be the wrong way to bring down federal spending, but working with Congress is a pain in the posterior because they want to delay until their pet projects are included not diluted. No one in Congress wants to trim spending because such would mean a loss of jobs for their constituents.

So, what about today’s headline: A penny (and a nickel) for your thoughts and the executive order to stop minting pennies? Well, that makes more sense and cents than anything else Trump wants to do.

The cost to mint a 1-cent penny is 3.7-cents And, it costs 13.8-cents to mint a 5-cents nickel. How about the 10-cents dime? That’s 5.8-cents, profitable, as is the 25-cents quarter coming in at 14.7-cents.

These costs include manufacturing, administration and distribution, according to the US Mint. Pennies are delivered to banks which pay 1-cent a coin, so the loss on 100 pennies is $2.70. Justifying deleting the penny with that analogy doesn’t make sense. Government is not there to make money, but it is there to reduce wasteful spending. Pennies are not needed.

Last year, according to the Mint, it produced and distributed more than three billion pennies and over 200 million nickels. Net loss from the pennies is about five times the loss from the nickels. Why lose anything on the coins? Let’s do away with pennies and nickels.

So what happens if there are no pennies or nickels? For those dealing in cash, if the price ends with any of these numerals, 1, 2, 3, 4, or 5, drop the price to end in 0. A check for $21.13 would revert to $21.10. If it ends in 6, 7, 8, or 9, round it up to end in 0 such as going from $21.18 to $21.20. The losses, rounding down to the 0, should be applied to the taxing entities as should the gains, rounding up to 0. Credit card and debit card transactions, the primary way of purchasing these days, would not change. Get it? Change!

Of course, the solution to this is not to stop by decree of King Trump and Czar Musk but to get Congress (unanimous action by Republicans and Democrats) to act, stopping the manufacturing and distribution of pennies and nickels.

Or, here’s another solution to the deficit spending on minting pennies and nickels: The Mint could double production of each and just get a second truck. And, that wouldn’t surprise me!