Kevin O’Leary Supports Trump’s Call to Eliminate the Penny
As discussions around the future of currency in the United States evolve, former President Donald Trump has recently directed the Treasury Department to halt the production of the one-cent coin, commonly known as the penny. This move has garnered support from various financial entrepreneurs, particularly ‘Shark Tank’ investor Kevin O’Leary, who has labeled the penny as “stupid” and virtually useless in today’s economy.
The Case for Halting Penny Production
In a post on Truth Social, Trump expressed his frustration over the penny’s production costs, stating, “For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” He elaborated on the need to revitalize the nation’s budget by eliminating such financial inefficiencies. “I have instructed my Secretary of the U.S. Treasury to stop producing new pennies. Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time.”
O’Leary echoed Trump’s sentiments during a recent interview on Fox Business, highlighting the penny’s impracticality. “Why would you pay two cents for a commodity that’s worth one? Who uses a penny anyways? Unless you’re putting them in your loafers, and nobody does that anymore, get rid of it. It’s useless,” he stated.
Economic Realities Behind the Penny
The financial implications of minting pennies are striking. According to the U.S. Mint, which is responsible for producing the nation’s coinage, each penny cost approximately 3.69 cents to produce in fiscal 2024—over three times its actual value. This has resulted in a staggering $85.3 million loss on penny production for the year. The nickel is also facing similar financial difficulties; it cost 13.78 cents to produce in the same fiscal year, leading to a loss of $17.7 million.
The continued production of the penny, as well as other low-denomination coins, prompts an essential examination of their place in the modern economy. O’Leary’s humorous comment about using pennies exclusively for ‘putting them in your loafers’ alludes to a bygone era when people often tucked pennies into such shoes. However, this practice has faded, largely because of inflation and the penny’s diminishing purchasing power.
A Diminished Role
Reflecting on the historical context, a penny once held significant value during the mid-20th century, capable of purchasing small everyday items like a stick of gum or a piece of penny candy. Today, that same single penny buys virtually nothing by itself, leading many vending machines and parking meters to stop accepting them altogether.
This decline in the penny’s value mirrors the broader trend of the U.S. dollar’s diminishing purchasing power, raising questions about the necessity of maintaining such low-denomination currency in a changing economic landscape.
In summary, as discussions continue about the future of the penny, both Trump and O’Leary highlight valid points regarding its practicality and economic viability. The fate of the penny may soon reflect a broader shift in how America views currency and what role it plays in modern commerce.
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