I forgot my paccsode and the home button is not working . how to erase the device and its passscode?

Connect the device to a computer with iTunes, and restore the device to factory settings. If you have not synced to the computer before, you may have to enter recovery mode.

If you can't update or restore your iPhone, iPad, or iPod touch - Apple Support

If you previously turned on FIndMyiPod on the iPod in Settings>iCloud and wifi is on and connected go to iCloud: Find My iPhone, sign in and go to FIndMyiPhone and use Remote Wipe to erase the contents of your device. If you have been using iCloud to back up, you may be able to restore the most recent backup to reset the passcode after the device has been erased.

You can also wipe the iOS device by installing the FindMyiPhone app on another iOS device and using that app to wipe the device.

or

Use the method in the following to place the iPod in Recovery mode without buttons and then restore via iTunes

Turn on without Home/Power Button