Production of the upgraded bills has been plagued by errors.
The new and improved 100-dollar bill, designed to cut down on counterfeiters, was expected to be released back in 2010, but production snafus delayed that date to 2011, and then again to October 2013. Today, David Wolman of The New Yorker reports that 30 million of the new $100 bills were incorrectly produced, and so the Federal Reserve might have to delay the bills' release once again.
It's another embarrassing problem for the Federal Reserve, which budgeted for the bills' release, and the Bureau of Engraving and Printing, which was responsible for its production. (Appropriately, the bureau's website is named moneyfactory.gov.) The bills' release in October can still be salvaged if the Fort Worth, Texas, branch of production makes up for the problems at the Washington, D.C., mint, but that timetable might not be feasible.
Importantly, though, the problem won't cost the government that much to fix, even though the bills represent $3 billion. Because the defective bills were not approved for release to the public, the cost of this faulty episode won't approach that number. Certainly, the production of new bills and disposal of the defective bills will cost taxpayers. Exactly how much will this error cost? With some back-of-the-napkin calculations, we came to a cost of $3.79 million. Let's go through that process.