Should we get rid of the Penny?

Question

Jeff Gore has suggested scrapping the 1 cent coins a few years ago. Why doesn't the US cancel the pennies? Is it that terrible to the economics to keep the copper coin?

As mentioned in the comments, Greg Mankiw has also discussed it here:

Per year, the average citizen wastes 12 minutes paying with pennies. That’s like half of an episode of The Office. Twelve minutes is also the length of the first human spacewalk by Soviet cosmonaut Alexey Arkhipovich in 1965.

Mankiw also estimated this 12 minutes of wasted time costs the U.S. economy approximately $1 billion every year.

Answer 1

Should we get rid of the Penny?

No. That would be as foolish as suppressing a symptom instead of addressing the illness.

The reason why "a penny does not buy a penny" --or being more accurate, why it no longer buys a penny-- is that currency depreciation has been policymakers' answer for too long and for too many issues.

The permanent, excessive printing of money inevitably weakens the purchase power of the USD. Metal prices, like everything else, go up where economic problems are "addressed" by issuing more bonds, giving more subsidies, ignoring the rapidly changing demographics, and pretending that welfare state still is sustainable.

The weakening of a currency by inflationary measures is not limited to rendering coin metals out of reach. At some point, even the cost of paper on which money is printed can also exceed the purchase power of the denominations printed on that paper. History has many examples of this.