Cent Proves Even Air is Expensive
January 25, 2010
With all of the problems on the plate of the Obama Administration, it is not too likely that priority status will be given to the problem of what to do about the cent and the nickel.
The Mint’s annual report, which covers fiscal year 2009, which ended Sept. 30, 2009, shows that even with dramatic declines in the prices of copper, zinc and nickel, the Mint still loses money on each coin it makes.
For the cent, the cost problem actually got worse. This is due to the fact that total mintages have plunged so dramatically. The overhead assigned to each coin goes up as the number made goes down. In the present economy, it doesn’t look like there will be an improvement any time soon.
It currently costs 1.61 cents to make a cent. The metallic value is roughly 0.61 cents, so overhead adds another cent. To make a ridiculous point, if the Mint made the present number of cents out of absolutely nothing, it will still cost them a cent to produce them.
Not a pretty picture when looking for alternative compositions.
It appears that the only rational choice is to abolish the denomination, but you know that will not happen.
For the nickel, the problem remains the high cost of copper and nickel. In 2009 it cost the Mint 6.05 cents for every nickel it made. A less valuable composition would make the denomination cost effective.
When will the compositions of the cent and nickel arise again? There is no way of knowing this with certainty. There is no advantage in an election year for either party to bring the issue up at all.
The irony for the nickel is that presently its face value equals its metallic value, a circumstance that hard money advocates want for all American coinage.
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