I believe that the paper the government has to print them on is getting more and more expensive
What makes you think that? Google "cost of printing money":
$1 and $2: 5.5 cents per note
$5: 10.9 cents per note
$10: 9.9 cents per note
$20 and $50: 10.6 cents per note
so it's getting harder for governments to print currency
If I could print 471 $50 notes by paying 1 $50 note that seems like a very cheap way of creating more money!
and manipulate the currency supply.
The FED doesn't need to print money to do this. They just adjust the interest a bit and punch some numbers into a computer.
The problem with notes is not that they are too expensive as you point out (thanks for the info by the way). Notes are too easy to store out of a bank, especially those of higher denominations.
If a bank wants to have negative interest rates, they need all the money in the banks, i.e. not in cash.
Thus they sell up the whole cashless society idea, which sounds nice and easy, but not when the interest rates are -5%. Don't worry though, credit cards will still charge 15%+ interest, only banks will have negative interest available to them.