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

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Although he's not the first to argue for this change, Musk's impact and outspoken views have brought new focus to the discussion about whether the penny still has a place in the modern economy.

It's not a recent concept. Economists, policymakers, and financial specialists have been discussing its feasibility for quite some time. The last time I recall using a penny was in a convenience store with a "give a penny, take a penny" dish.

Here's why Musk will likely be the driving force behind eliminating the penny (and maybe other coins) from our everyday lives.

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Producing pennies that are hardly used in everyday transactions. DOGE said on X that in 2023, the number was 179 million.

Musk, whose career has been built around finding ways to optimize efficiency - from electric vehicles to space travel to AI - can't help but see this as a total waste of resources. And honestly, he's spot on!

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This is about a new government built on common sense. From a business point of view, it doesn't make economic sense to keep producing something that costs more than it's worth.

Outside of the cost of production, pennies also cause delays in transactions. Whether it's at a store checkout counter, a vending machine, or a toll gate, dealing with pennies takes up a lot of time. Businesses and individuals waste a tremendous amount of hours every year counting and handling these low-value coins.

Cash transactions could move more quickly, which would benefit both businesses and customers; more people expected checks to be obsolete by now, however, they are still used. Most individuals realize that pennies have limited usefulness in our daily lives.

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the value of a penny to the point where many people refuse to pick one up from the ground.

In a time when digital payments and credit cards are so prevalent, the penny's part in everyday transactions has become much smaller. One proof of this is that Dollar Tree no longer typically sells items for a single dollar.

As our society continues to progress with technological advancements, digital payments have become increasingly popular. People typically rely on credit cards, debit cards, Venmo, Zelle, PayPal, and anticipate using 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.

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Musk is the leader making this change because he has significant influence, socially and politically. As the CEO of entities like Tesla, SpaceX, Neuralink, and more, he has a large number of followers. When he speaks out on an issue, such as getting rid of the penny, people take notice.

The comedian will use platforms like Twitter to share his opinions about various economic and financial matters. His popularity could help policymakers take the idea of eliminating the penny more seriously, especially if he continues to point out its inefficiencies.

Not everyone supports Musk's stance on the penny. Some Americans are attached to the coin because of its historical importance and its tie to President Abraham Lincoln. Others are concerned that dropping the penny could result in retailers rounding prices upward instead of downward, ultimately increasing the cost for consumers.

If the United States were to adopt Elon Musk's proposal and eliminate the penny, several changes would occur:

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Countries like Canada, which eliminated its penny in 2013, have shown that this rounding typically balances out, indicating that consumers do not suffer significant losses.

The government could save millions of dollars annually by ceasing the production of pennies.

Making cash purchases would be faster without having to handle and hand out pennies.

Removing the penny from circulation is based on logic, being practical with finances, and a matter of making sound economic decisions. While the penny still had a significant role at one point, inflation and improvements in technology have made it largely unnecessary.

Whether policymakers will take action on this issue remains to be seen, but Musk's influence has brought renewed attention to the question of whether it's time to retire the penny.

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