Donald Trump's executive order to end penny production is economically sensible, even if politically theatrical. The U.S. Mint spent $85 million last year producing 3 billion pennies that cost 3.8 cents each to manufacture—a straightforward loss disguised as currency. Inflation has made this worse: production costs doubled since 2020, when pennies ran just 1.7 cents. For an administration obsessed with cutting waste, eliminating the penny aligns perfectly with its stated mission to reduce government spending and national debt.
The precedent is already established. Canada ditched its penny in 2012. Australia removed its one- and two-cent coins in 1992—over three decades ago. New Zealand phased them out in 1990, then quietly redesigned all remaining coins to be smaller and cheaper to produce. Ireland, Finland, and the Netherlands never even accepted euro pennies in the first place. The Nordic countries went further, eliminating their own lowest denominations. These countries didn't collapse into chaos. Instead, they implemented rounding rules: cash transactions round to the next five-cent increment, a mechanism proven to cost consumers almost nothing. Canada's estimate suggests the impact was roughly seven cents per person annually.
The real tension is between efficiency and access. Rounding creates friction for the unbanked or those who distrust digital payment systems—a shrinking but real constituency. Yet the alternative, maintaining a coin that represents almost nothing in purchasing power, is absurd. A $36-per-hour wage means Americans earn roughly one cent per second; picking up a dropped penny costs more time than it's worth. The data suggests this is a solved problem, not an unsolved one. What matters now is execution: ensuring digital payment infrastructure reaches those still dependent on cash, rather than pretending the penny retains meaningful value in an era when even its metal costs four times what it buys.