The American Mint minted its last cent (1 cent) on Wednesday, November 12, ending 232 years of production that became absurd. Currently, the number of small coins in circulation is estimated at 300 billion. But what will large countries do with abundant funds stashed in supermarket checkouts, under sofa cushions, or in children’s wallets? Apparently… nothing at all. There will be no plans, The Atlantic reports.
Here’s the paradox of making money across the Atlantic: by 2024, one in two coins minted in the United States will be worth a penny, while almost none will be spent on commerce. Worse still, the production cost of a single unit was now over three hundred, meaning a deadweight loss on each hit. According to journalist Caity Weaver, who investigated the matter, everyone involved is aware of the absurdity of the system, but says they are required to continue it until Congress officially orders a halt to production.
This does not take into account section 31, section 5111 of the United States Code, which gives the Treasury the authority to stop minting coins – and which justifies the November 12 decision. The economic argument takes precedence: The country loses millions of dollars producing it, while no one uses it. Most people see almost nothing: according to government reports, most people have money “vanished” or is “stored” in the household.
The endless demand for new pennies
This never-spent currency creates constant demand so that cash transactions that require small change – that is, all transactions whose amounts end in 1,2,3,4,5,6,7,8 or 9 – can be completed. When returned cents are unused, they must be replaced, triggering a cascading reaction. “In other words, we keep printing coins because no one uses the coins we print.”explained Caity Weaver.
Besides being an economic waste, pennies also pose a very real problem: they are impractical. Each unit adds 2.5 grams of metal to a coat pocket or dresser drawer. “In reality, this is trash, which Americans have to pay for with their production taxes at a loss. Then they keep it for free in perpetuity”the journalist was angry.
A theory that resonates with those in charge of the Mint. In 2019, they warned federal auditors: if a fraction of the 1 cent coins ever spent were cashed out simultaneously, the flow would be as large as “logistically unmanageable” for the government.
No instructions come with it
However, when we approach a country penniless, no guidelines are issued. There is no explanation regarding rounding, or how to arrange cash payments after the last penny is withdrawn from circulation. “We are not aware of any projects in this direction”said Andrew Von Ah, director of physical infrastructure at the Government Accountability Office (GAO). Institution “not aware of any plans to remove the 1 cent coin from circulation or to reduce potential problems related to this suspension”.
But withdrawing coins from a currency is also hassle-free. Canada abolished the 1 cent in 2012, organizing a massive information campaign and recycling more than 15,000 tonnes of the token. But in the United States, the issue of recycling is more complex: pennies are mostly composed of copper-plated zinc, a material that is very difficult to separate. Recycled zinc is worth only a fraction of copper, raising doubts over producers’ willingness to recover it.
Conclusion: no one will come to collect the funds in circulation – not even the funds hidden under the carpet or in the piggy bank. No one can explain to the American population how to live without it. Plus, leftover pennies don’t seem to interest anyone, even for recycling.
