Some things are so simplistic they become too complicated to comprehend. I often find myself just shaking my head in total bewilderment. This happens most often with governmental issues. I’ve been watching this particular situation for quite some time now, and it continues to worsen. See if it makes any ¢ENTS to you.
Last year, I read an article proclaiming that the cost to produce a U.S. penny had risen to 1.23 cents per coin and the cost to produce our nickel rose to 5.73 cents per coin! Please take just a second to reread that sentence and see if you can stop your shaking your head as I did.
Wait … it gets even more preposterous, if that’s possible. Today, I read an article in the Chicago Tribune that the soaring cost of zinc, copper, and nickel as well as processing, labor and transportation costs has once again increased those cost numbers! It now costs the U.S. Mint 1.7 cents to make each penny and 10 cents to make a nickel! The dime and the quarter are still worth more than their cost of production — the dime costs 7 cents to make and the quarter checks in at 10 cents — but that could very well increase if the globe commodities surge continues.
You’d better sit down for this one. The Mint is one of the few government agencies that makes a profit! The Federal Reserve, which distributes money to banks, pays face value for coins. If a coin costs less to manufacture than the face value, the Mint makes a profit. Last year, the Mint’s coin-making profit was $730 million. Mint officials estimate the added penny and nickel expenses will reduce the Mint’s profit this year by $45 million. Officials report that Congress is unlikely to consider changes, given that the Mint is still making money on other coins.
The head of the U.S. Mint is scheduled to address a change in the composition of coins on Capitol Hill next week, but one lawmaker has already suggested another plan: scrap the penny altogether. An intense debate is anticipated as this subject has generated a great deal of controversy within the beltway.
Wouldn’t you really enjoy sitting in on that exchange of cerebral verbiage? What is there to discuss? Our government is currently spending MORE to make the money than the money is WORTH? How long can this phenomenon continue before a Congressional investigation reveals still another addition to our already gargantuan budget deficit? And the Beltway Braintrust wonders why more people vote for American Idol than they do for the President of the United States.