The Price Point

As Stuyvesant students prepare to enter the world, understanding the economy becomes an essential skill. In today’s society, knowledge of economics provides us with a foundation for navigating financial issues, understanding the effects of public policy on the market, and making informed decisions about our own personal finances.

President Trump Asks U.S. Treasury Department to Halt the Minting of New Pennies

On Sunday, February 9, President Trump declared that he asked the U.S. Treasury to stop minting new pennies, as they have become increasingly costly to produce over the years, going from 2.1 cents per penny in 2021 to 3.7 cents in 2024. Although the plan has not gone into effect, the production of pennies cost around $85 million in losses last year, and other plans have circulated around Congress in the past, including changing the material composition of pennies. However, the elimination of pennies would cause an increase in prices caused by rounding the prices up, which many business owners are afraid of. Getting rid of the penny could also increase the use of the nickel, which costs 14 cents to make and would also lose money.

House Passes Trump Administration Budget Plan

On February 25, the House of Representatives narrowly passed a new Republican budget plan with a vote of 217 to 215. The plan includes about $4.5 trillion worth of tax cuts and a $2 trillion reduction in government spending. Passing this plan through the House paves the way for more changes in government fiscal policy, which Republicans hope will include even more large cuts in taxes and federal spending, as well as better government efficiency. However, Democrats in the House argue that these massive tax cuts will add almost $3 trillion to the federal budget deficit.

Economics Concept of the Issue

The Tragedy of the Commons

The Tragedy of the Commons describes a situation that happens often where individuals act in their own self-interest and end up depleting a shared resource, which leads to negative outcomes for everyone. One example is the overgrazing of a communal pasture in which farmers try to increase their number of livestock in order to maximize their personal gain. In the real world, this situation often applies to environmental situations, such as deforestation and overfishing. As a result, government intervention and privatization are often used to regulate the use of resources.