Making No Cents
President Obama has taken his fair share of flak for not following through on campaign promises--from renegotiating NAFTA to reforming immigration to ending Don't Ask Don't Tell. But there's a slightly more obscure pledge--one he made at a March 2008 town hall meeting in Greensburg, Pennsylvania--that he may want to revisit.
"I will seriously consider eliminating the penny," then-candidate Obama said, in response to a voter who questioned the wisdom of producing coins so worthless that vending machines (and some stores) no longer accept them. At the time, a growing media mob of economists and their public allies were pointing their pitchforks at the penny. And their case was ironclad--or, rather, zinc-clad: The soaring price of the penny's primary ingredient had pushed the mine-to-mint production cost of each cent from .97 cents in FY 2005 to 1.67 cents in FY 2007 (at an annual loss of $54 million--or "negative seignorage," in coin-speak).