Gov’t Owie – $100 Bill and Billions

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Back in April, we blogged about the Department of the Treasury and their Bureau of Engraving and Printing’s newly announced Ben Franklin $100 bill with all of the new security features as anti-counterfeiting measures.

On October 1, 2010, a press release was circulated titled Federal Reserve Announces Delay in the Issue Date of Redesigned $100 Note . In particular, they comment, “The Bureau of Engraving and Printing manufactures Federal Reserve notes and has identified a problem with sporadic creasing of the paper during printing of the new $100 note, which was not apparent during extensive pre-production testing. As a consequence, the Federal Reserve will not have sufficient inventories to begin distributing the new $100 notes as planned.” Their initial release for the new, more secure $100 bills was February 10, 2011. 

Fast forward to today, December 6, and more details become known about the printing issues with the new $100 bills.

First, the Bureau of Engraving and Printing has printed over $110 billion in the new bills representing roughly 10% of our cash supply. Of those bills, as much as 30% could be flawed. But, the big issue is how to determine the flawed bills among the 1.1 million printed.

It’s estimated it would take 20 to 30 years to review the bills by hand. Various experts are working to determine if an automated process can be developed quickly, perhaps based on optical scanning, to solve the identification problem. Several news sources report that the bills will have to be burned if they do not find a solution quickly.

The cost to taxpayers to produce these problematic bills was roughly $120 million ($120,000,000). That’s a lot of production materials and costs to go up in smoke, but it may be the only feasible alternative considering both time and cost.

In the meantime, the officials have not determined the cause of the problem with their printing presses which means they haven’t found a solution either. Since the $100 bill is the most commonly used bill in national and international transactions, the delay in production can be an issue both domestically and globally.

In the articles below, one official was quoted as saying, “Somebody has to pay for this.” It looks like the taxpayers will pay, but will anyone else?

Source articles:

CNBC:  Uh Oh: The Government’s Printing Presses Have Broken Down!

Daily Finance:  Badly Printed $100 Bills Are a Multibillion Dollar Problem

Business Insider:  Check Out The Amazing $100 Bills That Are Literally Breaking The Fed’s Printing Presses

Fast Company:  Cash, Money, Woes: Inside the Fed’s $100 Billion Printer Error

Examiner.com:  New worry for the US money supply as new $100 bills printed with flaws 

FoxNews:  High-Tech Currency Leads to $110 Billion Problem

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