Amazingly, the government is capable of losing money by making money.
The penny has run out of luck, both in Canada and in the United States. Back in March, the Royal Canadian Mint announced that they were phasing out the penny due to “low purchasing power and rising production costs”, according to CBC News.
Canada was pigeon-holed into this decision after the penny decreased to 1/20th of its original purchasing power, becoming an unnecessary “burden on the economy.”
The U.S. is following Canada’s footsteps regarding the production of pennies and nickels. According to U.S. Treasury Secretary Tim Giethner, our U.S. Mint intends to remove the penny and nickel coins from circulation beginning early in January 2013.
The Mint currently spends about 4.8 cents per penny due to the rising costs of zinc and copper. A nickel valued at five cents now costs approximately 16.2 cents to make due to inflated nickel prices.
In comparison, the dime and the quarter are much more practical forms of coin currency. The dime only costs about 9.2 cents to mint and the quarter checks in at 21.31 cents. However, due to continued inflation expected in 2013, Geithner has warned that the dime may be in jeopardy of extinction as well. …