Is the United States still a great nation, capable of facing unafraid the challenges of the future? Or are we paralyzed by fear of change and capable only of wallowing in nostalgia for past greatness? Declinists might take as two small bits of evidence for their side of this argument the penny and the dollar bill. American coinage and currency have become ridiculous. A dollar is barely worth what a quarter was 20 years ago. At an average worker's wage, the time it takes to pick up a penny on the sidewalk is more than a penny is worth. Yet the U.S. Mint will manufacture almost 13 billion of these items in 1990. You have to whip out your wallet to buy a ride on most public transit systems. We have forgotten the pleasure of walking around with the weight of real, valuable "walking around" money jingling in our pockets.

Other nations have come to grips with past inflation and redignified their money. In Britain and France, the highest-value coin is worth about $1.70. In Germany and Japan it's about $3.00. The smallest British bill is now a 5 pound note, worth about $8.00. Japan's smallest note, 1,000 yen, is worth about $6.60. Canada eliminated the dollar bill last year.

A great nation makes national policy decisions based on the interests of society as a whole. A nation past its days of greatness is a cacophony of self-protective interest groups. There is a bill before Congress to replace the dollar bill with a coin and eliminate the penny. Leading the charge for currency reform is "The Coin Coalition," dominated by vending machine interests. Leading the opposition is "Americans for Common Cents," a front for the zinc lobby. Today's pennies are 97 percent zinc. Opponents also claim the support of the "Industry Council for Tangible Assets," whatever that is, the Professional Numismatics Guild and the Bowie Coin Club.

As is standard in this sort of legislative battle, both sides assert a touching concern for disadvantaged groups. The Coin Coalition notes that a dollar coin would be a boon to the "visually impaired." Americans for Common Cents counters that eliminating the penny would harm "those with incomes under $10,000, non-whites and Hispanics, and those adults with less than 12 years of education." Offered in support of this proposition is a study by an economics professor at Penn State University. Using an elaborate computer simulation, he concludes that even if the law requires rounding cash transactions up or down to the nearest nickel, the rounding will be up an average of 70 percent of the time. The aforesaid disfavored groups are more likely to do business in cash. Q.E.D.

On the other hand, The Coin Coalition offers evidence (in the form of a "Dear Abby" column) that the proliferation of near-worthless pennies is a threat to household pets, which swallow them and develop zinc poisoning.

Both lobbies, of course, claim that cost considerations are on their side. The pros flaunt a recent General Accounting Office study, which concluded that replacing the dollar bill with a coin would save the federal government $318 million a year. They play down the same study's conclusion that eliminating the penny would lose the government $2 million a year, since pennies still cost less than a cent to produce. Instead, they trumpet a 1987 study by the National Association of Convenience Stores, which figured that eliminating the penny would save two seconds per transaction for their members. Times 10 billion transactions a year, that's 5.5 million hours, or "$22 million in lost productivity."

The economist from Penn State ridicules the idea that clerks will "suddenly be free to stock shelves or clean stores" without the penny to deal with. He notes the cost of training them in the intricacies of rounding up and down. And he asserts that the inflationary effect of the "rounding up" phenomenon could eventually increase government-paid cost-of-living adjustments by as much as $1.5 billion a year. That wins the prize for the largest number either side has been able to throw around so far.

No one would ever design a coinage and currency system like the one inflation has bequeathed us. For all the warring studies, there can't be any serious question that eliminating the penny and moving to a dollar coin would be efficient. The question is whether we are too backward-looking to take the step forward.

The government is traumatized by the failure of the Susan B. Anthony dollar coin in 1979. But that was badly bungled. Among other problems, the Anthony dollar looked like a quarter. The GAO believes the key failure was not forcing people to use the coin. The next time, "Congress and the administration {must} jointly reach, and agree to sustain, an agreement to eliminate the dollar note in the face of negative public reaction." But what would be the point of such anti-democratic fortitude? Why not give people another chance to come to their senses voluntarily? After all, the dollar has lost almost half its value since that last experiment. As a paper currency, it's a joke. As a handsome, weighty coin, it could be great again.