February 11, 2025 • 9 mins
Mark W. Weller is an expert on this issue and says this would ultimately be a drain on the economy because prices would round up and before we know it, would end up costing us millions
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
At about ten after eight o'clock. One of the big stories,
of course, yesterday Trump administration announced that they're looking at
eliminating the penny. And I'm conflicted on this. The thought
is that the penny is it's it costs more money
to make than it's actually worth. That it costs over
three cents to produce a one cent coin, and that
(00:21):
is just physically physically irresponsible. I mean, you're running a
business or you're trying to run a household budget. If
you're spending two dollars to make one, that's it's a
losing proposition. Now, the other side is that, you know,
kind of the romantic nostalgic side, you know, a penny saved,
is a penny earned, a penny, wise, pound, foolish, a
(00:42):
penny for your thoughts. You know, people listening now, we
grew up with pennies, putting pennies in the in the
piggy bank, and you know. Here to make the case
against eliminating the one cent coin, we've got Mark Weller,
executive director of the pro penny operation called Americans for
Common Sense ce NTS. Mark, Good morning, what's the case
(01:04):
to keep the penny?
Speaker 2 (01:06):
Well? Good morning, Mike, we would hope the president would
reverse course. This is a horrible idea. There are several
reasons that we need a penny. First of all, I
would just mention that eliminating the penny is not going
to save money. It's actually going to cost more money.
A single nickel costs nearly fourteen cents, almost three times
at space value were talking about the penny costs. So
(01:29):
it's hard to understand how you're going to make the
economy do better and save money if you're spending more
money to make more expensive nickels. It just doesn't doesn't
work out that way. It's also really bad for consumers.
This is going to act like a hidden rounding tax.
We've done a lot of pulling on this issues. Americans
(01:49):
supports the penny, they abhor the idea of rounding transactions
to the nickel, and that's the result you're left with.
And then finally, I would just mention, this is really
bad for the economy. If there were two issues that
really stood out in the November election, it was the
border issue and the economy and inflation. And here we
are right out of the blocks and the administration wants
to talk about eliminating the penny rounding transactions to the nickels.
(02:12):
That's almost like waving a white flag into the face
of inflation. It's the wrong course of action.
Speaker 1 (02:18):
So instead of seeing prices at the three ninety nine,
would they go up to you know, fourh five, is
that what you're suggesting, And then that that would require
the production of more nickels.
Speaker 2 (02:31):
Then well, I think both of those actually or what
we would see happen. I mean, they would probably try
to institute a rounding scheme where you would have transactions
ending in certain numbers rand up and others round down.
But if there's one thing economists agree on, it's that
businesses have a profit motive, and I think you're going
(02:52):
to see an overall increase in pricing, and then you
actually on small transactions seven eleven knows how many coffee
and don't as they sell here at the those things
can be priced where those are always going to round
up around down. Now, the argument might be, well, gee,
that's just a couple of cents here. In the old
grocery stores convenience stores, they work on very small margins,
(03:12):
they can price things in a way that they'd round up,
and those sents really really do add ends up being
millions and billions of dollars.
Speaker 1 (03:20):
And so you're suggesting that, you know, people who are
on the lower income side of things tend to use
cash more, and this would be what they call like
a regressive tax, the rounding tax on folks who use cash.
Because you don't have the pennies and now you've got
to go to the nickel, then you would have to
produce more nickels to account for that. Nickels actually cost
(03:40):
thirteen cents to make, and we're just talking about a
whole a snowball effect here essentially.
Speaker 2 (03:46):
Now, you're absolutely right. I mean, if you carry this
to the conclusion, you'd say it takes fourteenth cents to
make a nickel, we want to do it with that too,
and we start rounding to the dime. It's a ridiculous proposition.
I think the more logical thing to do is not
just look at the penny, but modernizing our currency system
in a responsible way that would protect the choice people
(04:07):
would have to still use cash and coins and not
start and start eliminating coins. There are opportunities to make
our current nickel less expensively. But I want to go
back to your point. Yes, this is not only harmful
to consumers, but it just has a disproportionate impact on
lower income groups. The Federal Reserve survey. So you know,
(04:27):
we have a certain number of people around the country
that are unbanked or underbanked. They don't have the resources
they have checking accounts and charge cards, and they rely
predominantly on cash transactions, and those people are going to
have particularly hard impact if you start doing away with
coins and rounding rounding up you are the people that
sit around the kitchen table and really watch the budget
(04:48):
and it makes a difference.
Speaker 1 (04:50):
Mark. So we know it costs more to make a
penny than it's worth, it costs more to make a
nickel than it's worth. At what point what denilination of
coin do we get to You were to actually cost
less than it's.
Speaker 2 (05:01):
Worth, well the dime in the quarter, or have positive sceneries,
but I think we have to be you look a
little more closely here at why those costs are that
way that that the penny, for example, is made where
a private sector company actually produces a finished blank and
(05:22):
then the mint in Philadelphia and Denver, all they do
is stay paper and cans head on it. Yet the
mint says, well, over half our coins or pennies, so
we're just going to put half of our overhead and
costs and onto that coin. So it's really kind of
an unfair burden on the penny, and it leads to
the kind of conversations we're having now where people says, see,
it's three cents, and a lot of that is due
(05:44):
just to the internal accounting that the the mint uses.
But I do think Doge and Elon Usk and the
president or ride and trying to look at ways to
make our economy work better, to try to reduce some
of the costs. I just think this soul focus on
the penny is really short sighted. And as I mentioned,
it's going to cost more. If you don't have the penny,
(06:05):
you're going to make more nickels, and those cost more,
and that's that's the absolutely wrong way to go.
Speaker 1 (06:10):
What would you say to people though, that, you know,
they pay for something in cash at a convenience store
or the gas station, you know, and they get back,
you know, five dollars and twenty seven cents. Most folks
will take the two pennies, they'll pocket the quarter. They'll
take the two pennies at the twenty seventh times, and
they'll throw it in the dish on the counter because
the pennies are a nuisance there. We don't want them
jingling around in our pocket. They end up in a
(06:32):
change drawer at home or someplace in a jar. Yeah, kids,
piggyback or something like that. They're almost pennies for a
lot of folks are just discarded these days.
Speaker 2 (06:44):
Yeah, I would say that you know that it's important.
Load denomination coin is important for the very reason you
started out mentioning that in cash transactions it's helpful and
to have a load denomination coin and consumers benefit from that. Certainly,
many people do say that them use Some coins are
at the company you know that has those one receptacles
in our grocery store. You know they found In Canada,
(07:05):
when you didn't have the penny around, the velocity with
which coins started to move through the system dropped off
dramatically and the government actually had to start making more
nickels and higher denomination coins because pennies drive a lot
of that, uh, the way that people go in and
return turn those coins. But certainly they do have a function.
A lot of people use them in transactions. A lot
(07:27):
of people donate them to charity. Before we started to
see a dramatic change in the way we kind of
buy goods and services after COVID, where people were more
comfortable with plastic and digital transactions, what have you. We
saw a lot of coins going into charitable uses, you know,
the Ronald McDonald Foundation with those receptacles that your McDonald's
are looking into them fill a lot of these other groups, right,
(07:48):
millions of dollars every year, and a good portion of
that was due to the penny donations. So if people
don't want to use them, they could send them to
US or other charity that's still collect those and put
them to good use, supporting people around the country with needs.
Speaker 1 (08:02):
How do you look at There's a lot of other
countries that have already gone down this path, and the
United States is a little slow to adopt some of this,
this low value legal tender. I mean, a lot of
other countries have eliminated their one cent and two cent
load denomination coins for various other reasons. How are they
faring any things that we've been talking about this morning
(08:24):
come to pass in other countries?
Speaker 2 (08:28):
Yeah, I think there's a couple of things we should
look at there. First of all, it would just be
the way of the largest economy in the world. So
we just have to be careful when we talk about
changes like this, because I don't think you can make
an app comparison to more Canada. We were ten times
larger than their economy, Australia fifteen larger than theirs. But
there are a few instructive things, and I know in
(08:49):
Canada when that occurred in around twenty twelve, I believe
they were going to institute that change in November December
of the year, and there was a huge backlash from
merchants and businesses that said, you know, we don't want
to try to implement a rounding scheme. Our customers are
going to think they're on the losing side. This is
just a bad way to go. So they delayed that
(09:10):
for almost a year as they tried to educate people
about what they were doing. And I think it makes
the point I tried to make earlier that just Americans
really disliked this idea of arounding their transactions and nickel
that think they're going to lose, and they're probably right.
The other thing Canada saw was that they had an
influx of coins back in that they hadn't really counted on.
(09:31):
They thought they were going to say, around ten million dollars,
which is actually pretty small, but they found that people
started redeeming their coins. There's a great outflow of money
back to the banks to have to pay customers that
were bringing in their pennies that they weren't able to
that they thought they weren't going to be able to
use anymore. So there were the higher government outlays going
out to pay people for the pennies that were coming in.
At about ten after eight o'clock. One of the big stories,
of course, yesterday Trump administration announced that they're looking at
eliminating the penny. And I'm conflicted on this. The thought
is that the penny is it's it costs more money
to make than it's actually worth. That it costs over
three cents to produce a one cent coin, and that
(00:21):
is just physically physically irresponsible. I mean, you're running a
business or you're trying to run a household budget. If
you're spending two dollars to make one, that's it's a
losing proposition. Now, the other side is that, you know,
kind of the romantic nostalgic side, you know, a penny saved,
is a penny earned, a penny, wise, pound, foolish, a
(00:42):
penny for your thoughts. You know, people listening now, we
grew up with pennies, putting pennies in the in the
piggy bank, and you know. Here to make the case
against eliminating the one cent coin, we've got Mark Weller,
executive director of the pro penny operation called Americans for
Common Sense ce NTS. Mark, Good morning, what's the case
(01:04):
to keep the penny?
Speaker 2 (01:06):
Well? Good morning, Mike, we would hope the president would
reverse course. This is a horrible idea. There are several
reasons that we need a penny. First of all, I
would just mention that eliminating the penny is not going
to save money. It's actually going to cost more money.
A single nickel costs nearly fourteen cents, almost three times
at space value were talking about the penny costs. So
(01:29):
it's hard to understand how you're going to make the
economy do better and save money if you're spending more
money to make more expensive nickels. It just doesn't doesn't
work out that way. It's also really bad for consumers.
This is going to act like a hidden rounding tax.
We've done a lot of pulling on this issues. Americans
(01:49):
supports the penny, they abhor the idea of rounding transactions
to the nickel, and that's the result you're left with.
And then finally, I would just mention, this is really
bad for the economy. If there were two issues that
really stood out in the November election, it was the
border issue and the economy and inflation. And here we
are right out of the blocks and the administration wants
to talk about eliminating the penny rounding transactions to the nickels.
(02:12):
That's almost like waving a white flag into the face
of inflation. It's the wrong course of action.
Speaker 1 (02:18):
So instead of seeing prices at the three ninety nine,
would they go up to you know, fourh five, is
that what you're suggesting, And then that that would require
the production of more nickels.
Speaker 2 (02:31):
Then well, I think both of those actually or what
we would see happen. I mean, they would probably try
to institute a rounding scheme where you would have transactions
ending in certain numbers rand up and others round down.
But if there's one thing economists agree on, it's that
businesses have a profit motive, and I think you're going
(02:52):
to see an overall increase in pricing, and then you
actually on small transactions seven eleven knows how many coffee
and don't as they sell here at the those things
can be priced where those are always going to round
up around down. Now, the argument might be, well, gee,
that's just a couple of cents here. In the old
grocery stores convenience stores, they work on very small margins,
(03:12):
they can price things in a way that they'd round up,
and those sents really really do add ends up being
millions and billions of dollars.
Speaker 1 (03:20):
And so you're suggesting that, you know, people who are
on the lower income side of things tend to use
cash more, and this would be what they call like
a regressive tax, the rounding tax on folks who use cash.
Because you don't have the pennies and now you've got
to go to the nickel, then you would have to
produce more nickels to account for that. Nickels actually cost
(03:40):
thirteen cents to make, and we're just talking about a
whole a snowball effect here essentially.
Speaker 2 (03:46):
Now, you're absolutely right. I mean, if you carry this
to the conclusion, you'd say it takes fourteenth cents to
make a nickel, we want to do it with that too,
and we start rounding to the dime. It's a ridiculous proposition.
I think the more logical thing to do is not
just look at the penny, but modernizing our currency system
in a responsible way that would protect the choice people
(04:07):
would have to still use cash and coins and not
start and start eliminating coins. There are opportunities to make
our current nickel less expensively. But I want to go
back to your point. Yes, this is not only harmful
to consumers, but it just has a disproportionate impact on
lower income groups. The Federal Reserve survey. So you know,
(04:27):
we have a certain number of people around the country
that are unbanked or underbanked. They don't have the resources
they have checking accounts and charge cards, and they rely
predominantly on cash transactions, and those people are going to
have particularly hard impact if you start doing away with
coins and rounding rounding up you are the people that
sit around the kitchen table and really watch the budget
(04:48):
and it makes a difference.
Speaker 1 (04:50):
Mark. So we know it costs more to make a
penny than it's worth, it costs more to make a
nickel than it's worth. At what point what denilination of
coin do we get to You were to actually cost
less than it's.
Speaker 2 (05:01):
Worth, well the dime in the quarter, or have positive sceneries,
but I think we have to be you look a
little more closely here at why those costs are that
way that that the penny, for example, is made where
a private sector company actually produces a finished blank and
(05:22):
then the mint in Philadelphia and Denver, all they do
is stay paper and cans head on it. Yet the
mint says, well, over half our coins or pennies, so
we're just going to put half of our overhead and
costs and onto that coin. So it's really kind of
an unfair burden on the penny, and it leads to
the kind of conversations we're having now where people says, see,
it's three cents, and a lot of that is due
(05:44):
just to the internal accounting that the the mint uses.
But I do think Doge and Elon Usk and the
president or ride and trying to look at ways to
make our economy work better, to try to reduce some
of the costs. I just think this soul focus on
the penny is really short sighted. And as I mentioned,
it's going to cost more. If you don't have the penny,
(06:05):
you're going to make more nickels, and those cost more,
and that's that's the absolutely wrong way to go.
Speaker 1 (06:10):
What would you say to people though, that, you know,
they pay for something in cash at a convenience store
or the gas station, you know, and they get back,
you know, five dollars and twenty seven cents. Most folks
will take the two pennies, they'll pocket the quarter. They'll
take the two pennies at the twenty seventh times, and
they'll throw it in the dish on the counter because
the pennies are a nuisance there. We don't want them
jingling around in our pocket. They end up in a
(06:32):
change drawer at home or someplace in a jar. Yeah, kids,
piggyback or something like that. They're almost pennies for a
lot of folks are just discarded these days.
Speaker 2 (06:44):
Yeah, I would say that you know that it's important.
Load denomination coin is important for the very reason you
started out mentioning that in cash transactions it's helpful and
to have a load denomination coin and consumers benefit from that. Certainly,
many people do say that them use Some coins are
at the company you know that has those one receptacles
in our grocery store. You know they found In Canada,
(07:05):
when you didn't have the penny around, the velocity with
which coins started to move through the system dropped off
dramatically and the government actually had to start making more
nickels and higher denomination coins because pennies drive a lot
of that, uh, the way that people go in and
return turn those coins. But certainly they do have a function.
A lot of people use them in transactions. A lot
(07:27):
of people donate them to charity. Before we started to
see a dramatic change in the way we kind of
buy goods and services after COVID, where people were more
comfortable with plastic and digital transactions, what have you. We
saw a lot of coins going into charitable uses, you know,
the Ronald McDonald Foundation with those receptacles that your McDonald's
are looking into them fill a lot of these other groups, right,
(07:48):
millions of dollars every year, and a good portion of
that was due to the penny donations. So if people
don't want to use them, they could send them to
US or other charity that's still collect those and put
them to good use, supporting people around the country with needs.
Speaker 1 (08:02):
How do you look at There's a lot of other
countries that have already gone down this path, and the
United States is a little slow to adopt some of this,
this low value legal tender. I mean, a lot of
other countries have eliminated their one cent and two cent
load denomination coins for various other reasons. How are they
faring any things that we've been talking about this morning
(08:24):
come to pass in other countries?
Speaker 2 (08:28):
Yeah, I think there's a couple of things we should
look at there. First of all, it would just be
the way of the largest economy in the world. So
we just have to be careful when we talk about
changes like this, because I don't think you can make
an app comparison to more Canada. We were ten times
larger than their economy, Australia fifteen larger than theirs. But
there are a few instructive things, and I know in
(08:49):
Canada when that occurred in around twenty twelve, I believe
they were going to institute that change in November December
of the year, and there was a huge backlash from
merchants and businesses that said, you know, we don't want
to try to implement a rounding scheme. Our customers are
going to think they're on the losing side. This is
just a bad way to go. So they delayed that
(09:10):
for almost a year as they tried to educate people
about what they were doing. And I think it makes
the point I tried to make earlier that just Americans
really disliked this idea of arounding their transactions and nickel
that think they're going to lose, and they're probably right.
The other thing Canada saw was that they had an
influx of coins back in that they hadn't really counted on.
(09:31):
They thought they were going to say, around ten million dollars,
which is actually pretty small, but they found that people
started redeeming their coins. There's a great outflow of money
back to the banks to have to pay customers that
were bringing in their pennies that they weren't able to
that they thought they weren't going to be able to
use anymore. So there were the higher government outlays going
out to pay people for the pennies that were coming in.
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