The 9 ¢ Nickel, the 2 ¢ Penny
Will Nickel-Free Nickels Make a Dime's Worth of Difference?
Excerpt:
It costs the federal government up to nine cents to mint a nickel and almost two cents to make a penny. So, in addition to overhauling Big Finance, President Barack Obama wants to tinker with America's small change.
The president's plan to save money by making coins from cheaper stuff seems simple on its face. But history shows it would rekindle an emotional debate among Americans who fear changing the composition of their currency will hurt its value.
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Like many things produced in Washington, U.S. coins aren't what they seem. A penny is a copper-coated token made mostly of zinc. The nickel contains more copper than it does actual nickel. And no coin contains silver anymore.
Market forces, not metal prices, determine the value of American currency. Yet Americans persist, on websites like coinflation.com, in tracking the value of the metal in their currency.
"People believe that we are still on some sort of precious-metal standard," says Rod Gillis, educator at the American Numismatic Association.
As the White House looks to cut costs across government, "making coins from more cost-effective materials could save more than $100 million a year, which isn't just pocket change," says Dan Tangherlini, the Treasury Department's chief financial officer.
The government isn't saying which new materials it might use in coins. Most coin experts say creating non-metal coins would go over like a wooden nickel. Still, industrial porcelain, embedded with an identification chip, is seen as an outside possibility. A more likely candidate: an aluminum alloy, used by other countries for coins. But any switch is likely to be controversial.
Comment: Dump the penny. Have a 3 ¢ and a dime, quarter. Dump the $ 1 bill and just have the $ 1 coin!
