It makes "cents"
The penny no longer facilitates commerce.
The fact that the penny is still in circulation does not mean it is in any way useful. Inflation has eaten away at the value of the penny to such a degree that it no longer facilitates commerce. In other words, the penny cannot buy anything!
Remember the Half Cent?
The U.S. has already phased out a coin with no ill effects. The Mint stopped producing the half cent in 1857, when it was worth what a dime is worth today, and there was no public outrage or damaging economic effects. Assuming the timing was correct before, the penny should have been eliminated in 1950, when it was worth what a dime is today. The penny served us well for a while, but now, at more than 200 years old, it's unable to keep up with inflation. Isn't it time to let the penny retire?
The penny wastes money.
In 2011, the U.S. Mint produced almost 5 billion pennies—more than 60 percent of all coins made annually—at a cost more than twice their worth. A significant portion of the cost is for the zinc that makes pennies, which is why the zinc industry is paying its lobbyists six figures to keep the penny in production.
The Penny Hurts the National Economy
Walgreen's and the National Association of Convenience Stores estimated that handling pennies adds an average of 2 seconds to each cash transaction. Given the 107 billion cash transactions per year in 2012 (US Federal Reserve Payments Study), using pennies therefore wastes 120 million hours of time per year counting the time of both the customer and the store employee. At the US median income/hour of $17, that costs the economy $2 billion every year!
Penny Non Grata at Military Bases
For those who think it is un-American to stop production of the penny, consider this: the Department of Defense abolished the use of pennies at overseas military bases more than 30 years ago. According to the Army and Air Force Exchange Service, the coins are "too heavy and not cost-effective to ship." The same logic applies in the States, as five pennies weigh 12.5 grams compared to a 5-gram nickel.
Continuing to Honor Abe
A special interest group has suggested that to eliminate the penny is to forget Abraham Lincoln. Lincoln, and his memorial, however, are firmly ensconced on the $5 bill, which is not going anywhere. At a cost of 8.5 cents per note (based on the Federal Reserve budget for 2012), the $5 bill is both conducive to commerce and cost-effective.