The US penny has become the latest target of President Donald Trump's efforts to cut waste in the federal government, although the economic impact is probably negligible.
Mr Trump on Sunday directed the Treasury Department to stop minting the one-cent coin, because of rising costs. While he never raised the idea of an end to minting the penny before the announcement, Elon Musk's Department of Government Efficiency (Doge) took aim at the coin last month.
The US President, Mr Musk and Doge have moved at breakneck speed since Mr Trump's inauguration to reduce federal spending by cutting US foreign aid, cancelling diversity, equity and inclusion programmes, slashing federal contracts in government agencies and ending leases for federal buildings.
The penny has been a frequent target for removal from circulation, but had survived every campaign threatening its existence.
Robert Whaples, a professor at Wake Forest University, said the penny's time as an efficient coin to exchange goods and services has gone.
“The penny's not up to the task any more,” Prof Whaples said.
While Congress has the authority to make changes to coinage, he said the President could instruct the Treasury Department to produce more or fewer pennies. But it is unclear if he can demand the department to stop minting pennies altogether.
Mr Trump centred his argument for getting rid of the penny on the rising costs of producing it. The US Mint – a bureau within the Treasury Department – reported losing $85.3 million on the nearly 3.2 billion pennies it produced in the 2024 fiscal year. The current unit cost for the one-cent coin is 3.69 cents, the 19th consecutive fiscal year it remained above face value.
Prof Whaples described a “vicious cycle” in which shops pay out more pennies than they get, which leads to more pennies being made – but because they are worth so little they are usually ignored. Even if pennies cost nothing to make, he said the cost of people's time outweighs the cost of the one-cent coin.
Economic impact
Were the US to eliminate the penny, it would follow Canada and Australia in ditching one-cent coins. Brazil, Estonia, Ireland and the Netherlands have also stopped producing them.
When Canada announced its decision in 2012, it began requiring cash transactions to be rounded to the nearest five cents. The impact was minimal.
“Half the time you get beat by being overcharged two cents or three cents, and sometimes you make up two or three cents. So on average, there's no net effect,” said Jay Zagorsky, a professor at the Questrom School of Business at Boston University.
US consumers are also becoming increasingly less reliant on cash. Only 16 per cent of payments made in 2023 were done with cash, according to the Federal Reserve banks. It was also the first year most consumers used a form of payment other than cash on transactions of $25 or less.
“I think it's marginalised the penny even more,” Prof Whaples said.
Company Profile:
Name: The Protein Bakeshop
Date of start: 2013
Founders: Rashi Chowdhary and Saad Umerani
Based: Dubai
Size, number of employees: 12
Funding/investors: $400,000 (2018)
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
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Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
I Care A Lot
Directed by: J Blakeson
Starring: Rosamund Pike, Peter Dinklage
3/5 stars
RedCrow Intelligence Company Profile
Started: 2016
Founders: Hussein Nasser Eddin, Laila Akel, Tayeb Akel
Based: Ramallah, Palestine
Sector: Technology, Security
# of staff: 13
Investment: $745,000
Investors: Palestine’s Ibtikar Fund, Abu Dhabi’s Gothams and angel investors
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Essentials
The flights
Etihad (etihad.ae) and flydubai (flydubai.com) fly direct to Baku three times a week from Dh1,250 return, including taxes.
The stay
A seven-night “Fundamental Detox” programme at the Chenot Palace (chenotpalace.com/en) costs from €3,000 (Dh13,197) per person, including taxes, accommodation, 3 medical consultations, 2 nutritional consultations, a detox diet, a body composition analysis, a bio-energetic check-up, four Chenot bio-energetic treatments, six Chenot energetic massages, six hydro-aromatherapy treatments, six phyto-mud treatments, six hydro-jet treatments and access to the gym, indoor pool, sauna and steam room. Additional tests and treatments cost extra.
Mia Man’s tips for fermentation
- Start with a simple recipe such as yogurt or sauerkraut
- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.
- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.
- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
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UAE currency: the story behind the money in your pockets
ONCE UPON A TIME IN GAZA
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
Directors: Tarzan and Arab Nasser
Rating: 4.5/5
