In a compelling argument for the cessation of penny production, Kishore Kulkarni, a distinguished economics professor at Metropolitan State University of Denver, supports President Donald Trump’s proposal. The penny’s manufacturing costs, exceeding three cents per coin, render its continuation economically unfeasible, with the U.S. Treasury incurring losses exceeding $83 million last year alone due to the minting of 3.2 billion pennies.
Kulkarni highlights the minimal practical value of the penny, asserting that it is outdated: “There is almost zero-use value of the penny, and the cost is much higher now to produce,” reflecting a broader sentiment amid ongoing discussions to modernise currency.
Despite the logistical and financial reasoning behind the proposal, emotional ties to the coin featuring Abraham Lincoln complicate its discontinuation. While many American populations maintain fondness for this historical currency, comparable countries like Canada and Australia have transitioned away from low-value coins much more seamlessly, suggesting a shifting tide in public perception.
Although the penny has been a staple since 1793, forming part of the fabric of American society, its inflated production costs highlight an urgent need for change. Kulkarni argues that sticking to tradition for the sheer sake of it leads to unnecessary economic strain: “I’m not much into sticking to tradition at a higher economic cost.”
Interestingly, he notes that the nickel also suffers from a similar fate, costing over 13 cents to manufacture. The professor dismisses fears that abolishing small-denomination coins will inflate prices significantly, expecting only slight price adjustments rounding up or down.
Even if minting ceases, with billions of pennies in circulation, their presence will linger. However, in a world increasingly dominated by electronic payments, Kulkarni envisions a cashless future that mirrors the fate of these low-value coins: “cash per se could follow the route of the penny or nickel,” emphasising the push for economic adaptation in our digital age.
Kishore Kulkarni, an economics professor at MSU Denver, supports President Trump’s call to halt penny production due to high costs exceeding three cents per coin. The proposal aligns with ongoing global trends of discontinuing low-value coins, despite emotional attachments. Kulkarni believes this change could reflect broader shifts towards a cashless society, emphasising the need for economic evolution.
The discontinuation of penny production, advocated by MSU Denver’s Kishore Kulkarni, addresses significant economic inefficiencies. As production costs overshadow the coin’s worth, transitioning away from low-denomination currency could pave the way for a more cashless society. The emotional attachment many Americans feel towards the penny is juxtaposed with the practical realities of modern economics, urging a necessary evolution in our currency approach.
Original Source: red.msudenver.edu
