Pennies, nickels, and dimes can barely be described as money anymore. Legally they are, sure, but they don’t exactly circulate. A store of value? Practically nil. Medium of exchange? Only if you have a boatload of them, which won’t exactly endear you to whomever you’re transacting with. A unit of account? Technically, but I don’t know anyone who uses the hundredths place in his mental accounting. Marketing types will be quick to tell you that consumers treat $2.99 differently from $3.00, but that’s because of the hypnotic power of the left digit. No one cares about the right one anymore. It’s no wonder then that people so willingly pay the usurious 8.9 percent fee to use one of Coinstar’s 20,000 kiosks to convert unwieldy jarfuls of metal into paper money. In the United States, the question of killing at least the penny and nickel surfaces whenever the price of metals spikes. A few years ago, the cost of making a penny peaked at 1.8 cents per cent, and nine cents for a nickel. The penny has since come down; nickels are still at about six cents apiece, while each of the new dollar coins costs an impressive thirty-four cents. “The current situation is unprecedented,” the director of the U.S. Mint told Congress in the summer of 2010. “Compared to their face values, never before in our nation’s history has the government spent as much money to mint and issue coins.” Never before has the United States faced such “spiraling” costs to issued coinage—more, in fact, than the coins’ legal tender value. “This problem is needlessly wasting hundreds of millions of dollars.”
more from David Wolman at The Awl here.