Friday, April 4, 2008

Cost of a penny

Did you know it costs $0.017 to make a penny?  And it costs ten cents to make a nickel.  This problem goes away when it comes to the higher denominations.  The Mint wants the authority to adjust the metal content of the coins it manufactures without having to go to Congress and getting a law passed each time.  I think it would be possible to pass a law granting them this authority and which would still provide restrictions which would ensure the proper value of the coins we use for trade.

We have been using promissory paper for decades.  Why does our coinage have to be "worth" the same as the item that we are buying?  It is even a pretense these days that we are getting a 50 cent item in exchange for a piece of metal worth 50 cents when we hand over a 50 cent coin.

As long as our coins are "pretty" and feel substantial enough (which is why aluminum probably would not do), oh, and can not be counterfeited easily, then that should be all that matters.

What does matter is the value of a dollar in the world of trade and markets.  That value depends on the perceived value of our products and the strength of our economy.

I think we should go ahead and give the Mint the authority they are asking for to make the coins out of whatever metal they choose within certain restraints.
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