3 reasons why Elon Musk wants to get rid of the penny

Elon Musk, the billionaire portion entrepreneur and portion Cabinet subordinate known for his groundbreaking and disruptive innovations, including Tesla, SpaceX and Neuralink, has precocious been vocal astir his content that the U.S. should eliminate the penny.

While he is not the first person to advocate for this change, Musk's power and outspoken quality person brought renewed attention to the debate implicit whether the penny still has a spot in the modern economy.

The Case Against the Penny

The argument for getting rid of the penny is not new. Economists, policymakers and fiscal experts person agelong debated its practicality. The last clip I tin retrieve utilizing a penny was in the convenience store with a ‘give a penny, instrumentality a penny’ dish.  

Economists, policymakers and fiscal experts person agelong debated the practicality of the penny. (Getty Images)

Here why Musk will be the ultimate impetus successful removing the penny (and possibly different coins) from our regular lives.

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1. The Penny Is Worth Less Than Its Cost to Produce

One of the most compelling reasons to eliminate the penny is that it costs more to produce than its look value. According to the U.S. Mint, it costs about 2.7 cents to manufacture a single penny. Talk astir DOGE!  

This means that taxpayers are efficaciously losing wealth each clip a new penny is minted. The U.S. authorities spends hundreds of millions of dollars producing pennies that are hardly utilized successful regular transactions. DOGE said connected X that successful 2023 the number was 179 million.

Musk, who has built his vocation connected optimizing ratio – whether successful electrical vehicles, abstraction question oregon AI – sees this arsenic an evident waste of resources. And you cognize what, he’s right! 

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This is about a new government of common sense. From a concern perspective, it makes small sense to continue producing an point that costs much than it's worth.

2. Pennies Are Economically Inefficient

Aside from accumulation costs, pennies dilatory down transactions. Whether astatine a currency register, a vending instrumentality oregon a toll booth, handling pennies takes up time. Businesses and consumers alike discarded countless hours each twelvemonth counting and dealing with these low-value coins.

By removing a nearly worthless denomination, currency transactions could determination faster, benefiting some businesses and customers. Most radical thought checks would beryllium obsolete astatine this point, but radical inactive use them. But for sure, astir radical cognize that pennies person nary spot successful our regular lives.

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3. Inflation Has Made the Penny Obsolete

When the penny was archetypal introduced successful 1793, it had important purchasing power. Today, it buys astir nothing. Inflation has eroded the penny’s value to the point wherever galore radical refuse to pick 1 up off the ground.

Elon Musk arrives to talk astatine an indoor Presidential Inauguration parade lawsuit successful Washington, D.C., Monday, Jan. 20, 2025. (AP Photo/Matt Rourke)

In an epoch wherever integer payments and recognition cards dominate, the penny’s relation successful mundane commerce has dwindled. There’s a crushed that Dollar Tree hardly has thing that costs a dollar anymore. 

Society is evolving with technological advancements and galore forms of digital payments. Most radical usage recognition cards, debit cards, Venmo, Zelle, PayPal, and perchance cryptocurrency in the future.  

What tin you truly bargain for a penny anymore? When I was 20 years old, it was 12 CDs from Columbia House. Not anymore.

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Musk’s Influence and Public Reaction

Why is Musk the leader to make this change? For one, his opinions transportation weight, socially and politically. As the CEO of Tesla, SpaceX, Neuralink and different ventures, helium has a monolithic following. When helium speaks retired connected an issue – adjacent 1 arsenic seemingly insignificant arsenic eliminating the penny – radical wage attention.

Elon Musk arrives connected New Year's Eve astatine Mar-A-Lago nine connected Dec. 31, 2024, successful Palm Beach, Florida. (Eva Marie Uzcategui/Getty Images)

Musk has utilized societal media, peculiarly X (formerly Twitter), to express his thoughts connected assorted economical and financial topics. His power could assistance propulsion policymakers to seriously see eliminating the penny, particularly if helium continues to highlight its inefficiency.

However, not everyone agrees with Musk. Some Americans person a sentimental attachment to the penny, peculiarly because of its humanities value and relation with President Abraham Lincoln. Others interest that eliminating the penny could lead to retailers rounding prices up alternatively than down, efficaciously raising costs for consumers.

What Would Happen if the Penny Were Eliminated?

If the U.S. were to follow Musk’s proposition and get rid of the penny, respective changes would occur:

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Rounding Transactions: Prices would apt beryllium rounded to the nearest 5 cents. Studies from different countries such arsenic Canada, which eliminated its penny in 2013, person shown that this rounding tends to balance out, meaning consumers don’t suffer retired significantly.

Reduced Production Costs: The government could prevention millions of dollars each twelvemonth by halting penny production.

Faster Transactions: Cash purchases would beryllium quicker without the need to count and administer pennies.

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This should hap over the next 4 years

Elon Musk’s call to eliminate the penny is rooted successful logic, ratio and fiscal pragmatism. While the penny once served a meaningful purpose, ostentation and technological advancement person made it mostly irrelevant. 

Whether policymakers volition enactment connected this issue remains to be seen, but Musk’s power has reignited the conversation astir whether it’s clip for the penny to become a thing of the past.

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