Well those are whole pennies, right? I’m just talking about fractions of a penny here. But we do it from a much bigger tray and we do it a couple a million times.
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The big budget news is the massive cuts to Medicaid, but cuts to Medicare are included as well
https://www.marketwatch.com/story/the-current-republican-tax-bill-could-cut-500-billion-from-medicare-this-bill-just-gets-more-and-more-cruel-0af411b1?
How anachronistic to refer to pennies.
https://www.npr.org/2025/05/22/nx-s1-5407493/no-more-pennies-one-cent-treasury-stop-minting
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Minting nickels is also a money-loser for the government, since the five-cent coins cost about 14 cents each.
Treasury Secretary Scott Bessent told lawmakers that the administration believes it can break even on nickel production by changing the composition of the coins.
“I will point out that the dime is very profitable,” the secretary added.
Last year I happened to wonder how much the CPI has increased since I was in HS earning $1.10/hr at McDs. By some coincidence, the CPI went from 31.6 to 315.6 between Aug 1965 and Dec 2024. So a dime today is worth a tiny bit less than a penny was back then. I suppose we could eliminate nickels, too. (But then, what would we do with quarters?)
Dime and half-dollar all the way!
How much over $11.00 an hour does McDs now pay to its HS staff? I appreciate it varies by location so was wondering about the city you worked in.
Instead of waiting until dimes cost more than their worth, we could be ahead of the curve and eliminate pennies, nickels, and dimes all at once. I haven’t done the math, but if memory serves the dime is worth less than the half penny was when it was discontinued.
However, the government is still turning a significant profit on dimes…and really, the government needs all the positive cash flow it can get.
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They’re literally printing money. Any denomination not turning a profit is ridiculous. Could they not just stop printing dimes, print more of the other stuff, and make their profit that way?
Should they make penny/nickel/dime/quarter bills?
This is actually something Moody’s does not take into account in their credit ratings.
If you are a debt investor, and the US has $30T in treasury bills in the market (example) how would you be affected if the US decided to print $5T more?
Holders of US debt now have to worry about that one once Trump installs an apparatchik at the Fed
All the great dictators do this. Never any (officially reported, else shot) inflation, either.
What do you make of the credit spread between Apple and the govt issues?
Earlier this month, apple floated a series of bonds, rated AAA by Moody’s and AA+ by S&P. Seems to trade at about 70bps higher than treasuries, on an OAS measure.
It looks like an anomaly to my trading eyes. I think it’s because in the regulatory and risk management world, US treasuries usually can be held without a capital requirement. AAA bonds have small requirements, but they are not zero.
Any actuaries out there involved in solvency testing…is there any discussion going on about whether or not US Govt debt should still enjoy this…no risk…status?
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An interesting question, particularly when Trump has suggested in the past that the US could default on its debt.
I lived in Detroit. My grandsons who live in Cedar Rapids Iowa have never worked at McDs. But, they have had jobs at the local supermarkets and a couple concessions in arenas. Seems like starting pay is $14 - $16.
Our local McDs is advertising “up to” $15 to start.
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I look at the UK side (Solvency II) and we also don’t have a credit charge on Gilts. They are considered to be risk-free. I think they basically ignore credit risk if you can print money at will because you can’t really go bankrupt. This mostly applies to the existing global reserve currencies.
This actually worked out very badly during the European banking crisis as Greece was allowed to borrow large amounts of money from the market with debt denominated as risk-free. The whole thing was ludicrous of course and it predictably blew up.
I don’t really have an answer other than having a view that the risk-free nature of quite a lot of sovereign debt is going to become a much more important topic as debt levels continue to climb (along with their associated debt service costs) due to demographic decline.
I’m not sure bills would fix anything. Some Googling suggests one dollar bills cost about as much to manufacture as pennies, and they only last in circulation for 6 or 7 years compared to a penny’s thirty, so bills would cost more than coins taking into account how often they need to be replaced.
Meanwhile Trump is demanding the Fed cut interest rates
Somewhere, he’s said that after dollar debasement and before outright default the government will stop paying coupons on bonds that have them. That will of course drive yields higher, but it will fix short-term cash flows and avoid an outright default on the bond itself, but if that happens debt default will be inevitable.
I’m not even sure if traditional default is even possible. The number of dollars is not tied to any real, physical commodity. So it’s like telling me, at an NBA game, that the scorer is “out of points”. We have to call the game. I don’t see it.
On the other hand, it’s time to price in the deterioration of the rule of law and the protections of private property. What am I saying? Well we have seen it transpiring in real time.
POTUS decrees that a handful of law firms either pay a toll, or they lose their clients. Pure extortion.
Or maybe, either the Uni does “x”, or they lose their tax status. And maybe make your students criminals. That should leave a mark or two.
Special tax exemptions for firms to avoid tariffs…you guys can get into the club now…we will be back later to talk about the dues.
These actions are decidedly harmful to the owners of their own property. Semi nationalization, if you will. It undermines investor confidence across the board- both foreign and domestic. And having the government gut your business model isn’t truly a default, it’s financial impact is fairly similar.