Should the penny be abolished?

[True Federalist (진정한 연방 주의자)]

Yes, and next year would have been the perfect time to give this coin the send off it deserves.  Rather than celebrating 2009 with multiple designs before settling on a new Lincoln penny design that Illini hope lasts another 50 years, we should have chonse to celebrate 2009 with muliple designs as we retired the penny from circulation.

[True Federalist (진정한 연방 주의자)]

I think we should instead just find a cheaper way to make pennies - change to a cheaper material, cut holes in the middle like some countries do with their coins, make them smaller, etc.

We've already redone the penny multiple times, the latest being in 1982 when the current copper-plated zinc composition was chosen.  given the desire to maintain a visual difference with the dime, aluminum is not an option.  That leaves either copper-plated steel (as is used in the Canadian penny at a cost of about 0.8¢ each) or a radical redesign.  I can't see a radical redesign as being accepted by the public, so while we could probably eke out a few more years for the penny by switching to a steel core.  Copper-plated aluminum would be cheaper, but is probably out of the question as copper-plated zinc has problems as it is with corrosion due to the difference in the electronegativity of the two materials and the difference is greater with copper and aluminum.

As for the suggestion of using a hole, while holes are useful for making coins more easily distinguishable, they don't save much in materials cost.  Assuming you keep the same diameter and make the diameter of the hole as wide as the radius of the ring of metal around it, you've only managed to reduce the materials used by 1/9.  However, I suppose StatesRights would approve of putting a hole in Lincoln's head.

[True Federalist (진정한 연방 주의자)]

I'd like to know whatever happened to 50 cent pieces.  I mean, I used to get them all the time.  Now, almost never.  I thought they were great!

By 1964, the price of silver reached the point where the dime, quarter, and half dollar were worth more to melt than to spend, so the government decided to redo them, but they didn't redo them all in the same way.  Starting in 1965, they began minting dimes and quarters that are the same as those minted today in composition, but they didn't abandon silver entirely as the new half dollar was 40% silver instead of the old 90% silver composition.  While it was a low enough silver composition to make the coins have a higher face value than melt value, it wasn't enough to keep people from hoarding the coins.  It got bad enough that in 1970, the mint only made half dollars for mint sets and proof sets as they waited for Congress to pass a law that would allow them to mint the half dollar using the same cupronickel clad composition as the dime and quarter dollar.  By then damage had been done and people were less accustomed to using the half than before. Strike 1.

Then there is the vending machine.  Once upon a time items sold in vending machines often required exact change and few items sold in them were priced high enough as to require a half dollar.  Even when vending machines got more complicated, the fact was that half dollars are the largest coin (even before the SBA was introduced in 1979, full size dollars hadn't been commonly used in decades)  and so eliminating the half dollar from the accepted coins meant that it was easier to design and build vending machines, so they generally didn't bother.  Strike 2.

Finally, there's good old fashioned human psychology.  While humans have shown through the years and many countries that they need at least one unit of money between adjacent multiples of 10, they don't really need two such units.  The 2¢ coin never took off in this country.  $2 bills suffered the same fate. And the $50 bill is less used than either the $20 or the $100.  There's no intrinsic advantage beyond being what people are used to for filling the void between 1 and 10, but if other factors cause one of two intermediate values to decline in use, it rarely manages a comeback.  Strike 3.

[True Federalist (진정한 연방 주의자)]

I end up with about $500 bucks when the jar gets to the point I can barely lift it.

Then use a smaller jar.

[True Federalist (진정한 연방 주의자)]

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/02/29/national/w084603S20.DTL&feed=rss.business
Asked Friday whether he thought the penny should be eliminated, Paulson agreed that it would make sense, saying, "The penny is worth less than any other currency."

I'm not exactly sure where he's going with this.  Of course it's worth the least, it's a freaking penny.  It's the smallest denomination of currency.  All others are naturally worth more.

Where he's going with this is that compared to the coins of other developed economies, the U.S. penny is the smallest in value of those currently minted and circulating.  It is worth less than the Canadian penny, the Euro cent, the British pence, the Japanese yen, the Danish 25 øre, the Hong Kong 10¢, the Iceland 1 króna, the South Korean 10 ₩, the Taiwan half dollar, the New Zealand 10¢, the Australian 5¢, the Norwegian 50 øre, and the Swiss 5 centimes.  It's also higher that in value than the smallest coin of a number of second tier economies such as the Brazilian 5 centavos, the Chilean 10 pesos, , the Slovak 50 halierov, and the Latvian 1 santīms.

[True Federalist (진정한 연방 주의자)]

Because the dollar is weak right now.

If you use this logic, then Europe should get rid of the €.01 and Britain should drop the pence piece.  One euro cent spends in Europe just like a penny in the U.S.  You can't use the whims of the currency exchange to justify dropping types of coins.

I would argue that the actual value of a penny is higher than the value of a euro cent, as the one euro cent piece is quite small and pathetic and annoying. (the 2 euro cent piece is actually closer to penny sized)

Actually, Finland and the Netherlands have already withdrawn both the 1 and 2 euro cent coins from general circulation because they don't consider the coins worth the effort, though they still remain legal tender there.