Trump says he has directed Treasury to stop minting new pennies

Scope and Motivation of Ending Penny Production

• Many note the idea is old; other countries (Canada, Mexico, New Zealand, parts of the Eurozone, Japan) have already removed low‑value coins and used cash rounding.
• Some see this as one of the few sensible policy moves, arguing nothing costs mere cents anymore and pennies mostly accumulate unused.
• Others see timing and framing as political theater: a distraction during a major sporting event and part of a “flood the zone” strategy to normalize rule‑bending.

Legality and Constitutional Debate

• One camp argues it’s unconstitutional because the Constitution gives Congress power “to coin Money,” and historically Congress has controlled denominations.
• Others counter with U.S. Code Title 31 §5111: the Treasury Secretary must mint coins in “amounts the Secretary decides are necessary,” which could include deciding the necessary amount of pennies is zero.
• There’s a distinction drawn between:
  • Permanently eliminating a denomination (generally seen as needing Congress).
  • Temporarily halting minting while leaving existing coins legal tender (argued to be within Treasury’s discretion).
• Some worry that even if this particular move is arguably legal, the pattern of unilateral actions serves to acclimate the public to executive overreach.

Economic Effects: Rounding, Prices, and Inflation

• Concern: with no 1‑cent coin (and no 2‑cent coin like the euro), the de facto minimum cash unit becomes 5 cents, potentially nudging prices and inflation upward.
• Others note:
  • Most transactions are digital; rounding usually applies only to cash (“cash rounding”).
  • In practice, the total bill is rounded to the nearest 5 cents, often under published rules meant to average out; some retailers even always round down as a goodwill gesture.
  • Examples from Canada and Europe suggest minor, mostly negligible impact if properly implemented.
• There is debate over whether merchants would quietly reset sticker prices upward to exploit rounding; some think competition and consumer resistance limit that.

Costs, Denominations, and Seigniorage

• It costs more than face value to mint both pennies and nickels, with nickels reportedly much worse on a per‑coin basis.
• Some argue both pennies and nickels should end, leaving dimes/quarters (or even starting cash at higher values), noting other countries manage with 10c/20c as their smallest coins.
• Others suggest instead reformulating the nickel to cheaper metals, but point out vending machines and coin validators would need updating.

Technical and Practical Issues

• Point‑of‑sale systems in the U.S. may need minor updates to support rounding for cash; Canadian commenters say their registers haven’t required fundamental changes.
• Sales tax complications are raised: states may need explicit rules to allow rounding without under‑ or over‑collecting tax.
• Side discussions cover legal limits on melting coins, the role of coins as medium of exchange vs. their metal value, and speculative ideas like higher‑denomination bills or even deflation to “make the penny valuable again.”