Against my better judgement I clicked on the CGP Grey video about "why nickels should be discontinued" they say something like:
"It costs the government more than 5 cents to make a nickel and once you incorporate the cost of minting and labor it's 13 cents..."
All this results in a "loss" of 100million.
This seems logical enough, but when a government is minting money does it make sense to count "manufacturing costs" as if the government were a business that sells.. uh ... money?
"The US Government wastes 100 million dollars making nickels!" (places pinky on lip like Dr. Evil)
—is just the kind of obnoxious factoid that will never go away. Obnoxious because NOT making nickels won't automatically save 100 million. You still need to run the mint.
When it comes to printing money the question is "what do you WANT" to do? You are creating the value.
IDK I just don't want to hear about this forever and now we will.
A mint’s job is to replace currency that's worn out but also to adjust the currency supply.
I'll focus on that first practical task: replace worn out coins so there are still useful coins around. Banks make orders for coins and bills. They must still be ordering nickels for some reason.
@futurebird The problem is that sometimes the reason is "Legislation currently says we need to print nickels.".
Like he said in his video about pennies, these currencies don't actually end up getting spent anywhere - because most places won't even accept them anymore.
And it's why the U.S. discontinued half-cent coins - you couldn't spend them even if you wanted to, in a way that made printing them worth the recirculation costs.
@futurebird Or TL:DR; we're not *replacing* the worn out currency - we're just making more currency that will be worn out because it sits around.
(At least here in Canada, I've very rarely seen a place I could actually use a nickel as a transaction, except *maybe* to offset the change I would get from using a loonie or a bill to pay for something, turning the change into something like a quarter?)
@AT1ST @futurebird Finland decided to not make any 1 and 2 cent coins. I think they do 5 cents, and shops round your total to the nearest 5 cents.
We did the same thing in Ireland. 1c and 2c coins remain legal tender because other eurozone countries still use them, but we no longer mint them, and any amount paid with cash is rounded to the nearest 5c. (Debit card payments are not rounded).