Thomas Daniels
In an attempt to reduce federal spending, Elon Musk’s Department of Government Efficiency (DOGE) has set its eyes on the U.S. penny, an unexpected place to start. The organization, which was first established under the Trump administration, pointed out a startling inefficiency in U.S. Mint operations in a tweet on Tuesday. According to the Mint’s 2024 data, each penny costs roughly 3.7 cents to make, while having a 1-cent face value. Approximately $179 million was spent by taxpayers in FY2023 to produce 4.5 billion pennies.
Is the Penny in danger of being extinct?
The penny’s expensive manufacture is not unique. A nickel costs 14 cents to mint, and manufacturing inefficiencies for both coins have been made worse by increased zinc prices. Other countries have already acted, but the U.S. government is still struggling with these costs. For example, Canada stopped producing pennies in 2012 due to similar economic issues. In order to reduce disturbance and save millions of dollars a year, Canadians switched to rounding currency transactions to the nearest five cents.
Dogecoin is Musk’s cryptocurrency twist.
According to reports, Elon Musk, a vocal supporter of cryptocurrencies, intends to integrate Dogecoin (DOGE) into federal banking systems as part of larger cost-cutting initiatives. His cost-cutting agency is even named after the meme-inspired token, Dogecoin.
But there are concerns about utilizing Dogecoin as a solution supported by the government. Like Bitcoin, Dogecoin requires a lot of energy to mine, and the expenses are frequently more than the coin’s market worth. The method may become economically unsustainable due to elements like electricity costs and antiquated mining equipment. Profitability is still erratic even though technological developments have decreased Dogecoin’s energy requirements in comparison to Bitcoin.
Profitability for Dogecoin miners depends on the state of the market. Mining becomes profitable during price spikes, but operational expenses usually exceed profits when the token’s value declines. Additionally, critics point out that Dogecoin’s extreme market volatility and limited usefulness make it difficult to integrate into government systems.
A More Comprehensive Talk About Cost-Cutting
Musk’s DOGE project sparks controversy, but the subject of government inefficiencies as a whole is still pertinent. Using cryptocurrency or stopping the manufacturing of pennies and nickels is just one aspect of the federal government’s potential cost-cutting measures. The key question for taxpayers is whether these unorthodox tactics can produce significant outcomes.
