3 reasons why Elon Musk wants to get rid of the penny

Elon Musk, the billionaire part entrepreneur and part Cabinet member known for his groundbreaking and disruptive innovations, including Tesla, SpaceX and Neuralink, has recently been vocal about his belief that the U.S. should eliminate the penny.

While he is not the first person to advocate for this change, Musk’s influence and outspoken nature have brought renewed attention to the debate over whether the penny still has a place in the modern economy.

The Case Against the Penny

The argument for getting rid of the penny is not new. Economists, policymakers and financial experts have long debated its practicality. The last time I can remember using a penny was in the convenience store with a ‘give a penny, take a penny’ dish.  

Here why Musk will be the ultimate impetus in removing the penny (and maybe other coins) from our daily lives.

OUR COUNTRY NEEDS A TURNAROUND STORY TO SAVE ITSELF. ELON, VIVEK AND DOGE CAN RESTORE OUR SANITY

1. The Penny Is Worth Less Than Its Cost to Produce

One of the most compelling reasons to eliminate the penny is that it costs more to produce than its face value. According to the U.S. Mint, it costs about 2.7 cents to manufacture a single penny. Talk about DOGE!  

This means that taxpayers are effectively losing money every time a new penny is minted. The U.S. government spends hundreds of millions of dollars producing pennies that are hardly used in daily transactions. DOGE said on X that in 2023 the number was 179 million.

Musk, who has built his career on optimizing efficiency – whether in electric vehicles, space travel or AI – sees this as an obvious waste of resources. And you know what, he’s right! 

A PERFECT FIRST WEEK FOR PRESIDENT TRUMP (WITH AN ASTERISK)

This is about a new government of common sense. From a business perspective, it makes little sense to continue producing an item that costs more than it’s worth.

2. Pennies Are Economically Inefficient

Aside from production costs, pennies slow down transactions. Whether at a cash register, a vending machine or a toll booth, handling pennies takes up time. Businesses and consumers alike waste countless hours each year counting and dealing with these low-value coins.

By removing a nearly worthless denomination, cash transactions could move faster, benefiting both businesses and customers. Most people thought checks would be obsolete at this point, but people still use them. But for sure, most people know that pennies have no place in our daily lives.

TRUMP’S BORDER SURGE IS WORKING. HERE ARE 5 THINGS LIKELY TO HAPPEN NEXT

3. Inflation Has Made the Penny Obsolete

When the penny was first introduced in 1793, it had significant purchasing power. Today, it buys almost nothing. Inflation has eroded the penny’s value to the point where many people refuse to pick one up off the ground.

Elon Musk arrives to speak at an indoor Presidential Inauguration parade event in Washington, D.C., Monday, Jan. 20, 2025. (AP Photo/Matt Rourke)

In an era where digital payments and credit cards dominate, the penny’s role in everyday commerce has dwindled. There’s a reason that Dollar Tree hardly has anything that costs a dollar anymore. 

Society is evolving with technological advancements and many forms of digital payments. Most people use credit cards, debit cards, Venmo, Zelle, PayPal, and possibly cryptocurrency in the future.  

What can you really buy for a penny anymore? When I was 20 years old, it was 12 CDs from Columbia House. Not anymore.

REPUBLICANS IN CONGRESS MUST IMMEDIATELY ADVANCE TRUMP’S MAGA AGENDA

Musk’s Influence and Public Reaction

Why is Musk the leader to make this change? For one, his opinions carry weight, socially and politically. As the CEO of Tesla, SpaceX, Neuralink and other ventures, he has a massive following. When he speaks out on an issue – even one as seemingly minor as eliminating the penny – people pay attention.

Elon Musk arrives on New Year’s Eve at Mar-A-Lago club on Dec. 31, 2024, in Palm Beach, Florida. (Eva Marie Uzcategui/Getty Images)

Musk has used social media, particularly X (formerly Twitter), to express his thoughts on various economic and financial topics. His influence could help push policymakers to seriously consider eliminating the penny, especially if he continues to highlight its inefficiency.

However, not everyone agrees with Musk. Some Americans have a sentimental attachment to the penny, particularly because of its historical significance and association with President Abraham Lincoln. Others worry that eliminating the penny could lead to retailers rounding prices up rather than down, effectively raising costs for consumers.

What Would Happen if the Penny Were Eliminated?

If the U.S. were to follow Musk’s suggestion and get rid of the penny, several changes would occur:

CLICK HERE FOR MORE FOX NEWS OPINION

Rounding Transactions: Prices would likely be rounded to the nearest five cents. Studies from other countries such as Canada, which eliminated its penny in 2013, have shown that this rounding tends to balance out, meaning consumers don’t lose out significantly.

Reduced Production Costs: The government could save millions of dollars each year by halting penny production.

Faster Transactions: Cash purchases would be quicker without the need to count and distribute pennies.

CLICK HERE TO GET THE FOX NEWS APP

This should happen over the next four years

Elon Musk’s call to eliminate the penny is rooted in logic, efficiency and financial pragmatism. While the penny once served a meaningful purpose, inflation and technological progress have made it largely irrelevant. 

Whether policymakers will act on this issue remains to be seen, but Musk’s influence has reignited the conversation about whether it’s time for the penny to become a thing of the past.

CLICK HERE TO READ MORE BY TED JENKIN