In a bold move to address rising government expenses, Elon Musk’s newly formed Department of Government Efficiency has set its sights on eliminating the US penny. Musk’s push stems from growing concerns over the coin’s manufacturing costs, which have significantly outweighed its monetary value.
In a post on X (formerly Twitter), the department highlighted that producing a single penny costs over 3 cents, amounting to a staggering $179 million burden on taxpayers during the 2023 fiscal year. The US Mint reported producing 4.5 billion pennies in FY2023—nearly 40% of all circulating coins manufactured that year.
The cost of producing and distributing pennies has continued to climb, reaching 3.7 cents per coin in fiscal year 2024 due to the rising prices of zinc and copper. These increases mark more than a 20% uptick from the previous year.
The debate over the penny’s future is far from new. For decades, critics have pointed out that pennies often fail to circulate, instead collecting dust in jars or drawers. This inefficiency has only grown more apparent in the digital age, as online shopping and electronic transactions increasingly dominate consumer behavior.
Even pop culture has weighed in on the debate. A 2001 episode of The West Wing featured a fictional rant by Sam Seaborn about the penny’s irrelevance. Last year, The New York Times Magazine joined the chorus, calling the coin “a symbol of deeper rot” in government inefficiency.
Experts argue that abolishing the penny could lead to significant productivity gains, particularly in retail. According to Jeff Lenard of the National Association of Convenience Stores, eliminating pennies could save over 1,200 days’ worth of time annually by speeding up cash transactions at convenience stores alone.
Musk’s initiative comes amid his deep involvement with the Trump administration, following the recent establishment of the Department of Government Efficiency. While Musk was originally set to co-lead the department with Vivek Ramaswamy, reports indicate Ramaswamy has since been pushed out.
As the debate reignites, Musk’s proposal to eliminate the penny may signal the beginning of broader cost-cutting measures aimed at streamlining government operations. However, it remains to be seen whether this decades-old issue will finally see resolution.