When something costs more to produce than it’s worth, why wouldn’t you get rid of it? That’s what lawmakers are asking themselves about something you’ve got in your pocket.

According to a 2007 Treasury audit, it now costs 1.7 cents to make a penny and 9.5 cents to make a nickel.

As with any manufactured item, the culprit is higher prices on materials. High demand for copper, zinc, and nickel has driven prices up worldwide.

So what are lawmakers proposing? Two ideas are floating around:

1. Change the composition of the coins to control material costs, or
2. Stop making pennies all together.

Neither idea is new. To help lower costs, the penny’s composition was changed to steel with a thin zinc coating during World War II.

But a composition change can backfire: The main fear is that people will hoard the current pennies and nickels because they’re worth more than their face value.

As for dumping the costly currency, far more people seem willing to get rid of the cumbersome copper altogether. But very few support getting rid of nickels since they’re needed to make change for quarters and dimes.

Also, without a penny-valued currency, all prices would need to be rounded up (or down) to the latest nickel, and that could be a costly move for consumers (or businesses).

The most prominent advocate for keeping the penny: charities. They get a lot of cash from folks dropping pennies into their buckets.

Tags: Charities, Consumers, Currency, Supply and demand