Is it a good idea to invest in "forever" stamps?

Answers to your questions about the news.
May 17 2007 4:10 PM

Should I Invest in "Forever" Stamps?

Absolutely not.

Illustration by Robert Neubecker. Click image to expand.

The postal rate climbed 2 cents on Monday, about a month after the United States Postal Service introduced its new "forever" stamp. As of last week, the USPS had sold more than $82 million worth of the forever stamps, which lock in the 41-cent rate for eternity. One man in Pennsylvania walked into a post office and made an $8,000 investment on his own. Should we all be stocking up?

Absolutely not. Since 1971, postal rates have increased more slowly than the actual inflation rate, as measured by the U.S. Consumer Price Index. So, despite the numerous rate hikes over the last 36 years, stamps have actually been getting cheaper. The  20-cent stamp from 1981, for instance, would be equivalent to 45 cents in today's dollars—which makes today's rate 10 percent cheaper than it was 26 years ago. Should this historical pattern hold, you'd be paying more for today's forever stamps than you would for any stamp in the future, no matter how high the rate goes.

Advertisement

In fact, this pattern must hold—as a matter of law. In December, President Bush signed the Postal Accountability and Enhancement Act, which ensures that future price increases will be kept below an inflation-based ceiling. In other words, postage hikes will never surpass inflation—and the forever stamp will never become a good investment. Incidentally, the USPS announced the introduction of the forever stamp less than two months after Bush signed the act into law.

The USPS is not the first postal agency to catch on to the benefits of a forever stamp, which in philatelic circles is known by a less sexy moniker, "non-value indicator." Canada introduced them last November, joining Finland, Israel, the United Kingdom, Belgium, France, Norway, Monaco, and Sweden, among others.

American forever stamps would have been a good investment if they'd been introduced much earlier. The 2-cent stamp from 1919 would have been a real bargain, at a cost of 24 cents in today's dollars; so would 1952's 3-cent stamp (23 cents today). A forever stamp would have been attractive to the consumer as late as 1971—the year the USPS was formed—when first-class postage was just 6 cents, equal to 31 cents today. The biggest rip-off in the modern era? The 13-cent stamp from 1975—which would be 50 cents today.

Got a question about today's news? Ask the Explainer.

Nathaniel Rich is the author ofThe Mayor's Tongue, a novel, and San Francisco Noir, a book of film criticism.

TODAY IN SLATE

History

The Self-Made Man

The story of America’s most pliable, pernicious, irrepressible myth.

Does Your Child Have Sluggish Cognitive Tempo? Or Is That Just a Disorder Made Up to Scare You?

Mitt Romney May Be Weighing a 2016 Run. That Would Be a Big Mistake.

Amazing Photos From Hong Kong’s Umbrella Revolution

Rehtaeh Parsons Was the Most Famous Victim in Canada. Now, Journalists Can’t Even Say Her Name.

Television

See Me

Transparent is the fall’s only great new show.

Doublex

Lena Dunham, the Book

More shtick than honesty in Not That Kind of Girl.

What a Juicy New Book About Diane Sawyer and Katie Couric Fails to Tell Us About the TV News Business

Rehtaeh Parsons Was the Most Famous Victim in Canada. Now, Journalists Can’t Even Say Her Name.

  News & Politics
Damned Spot
Sept. 30 2014 9:00 AM Now Stare. Don’t Stop. The perfect political wife’s loving gaze in campaign ads.
  Business
Moneybox
Sept. 30 2014 10:44 AM Bull---- Market America is overlooking a plentiful renewable resource: animal manure.
  Life
Atlas Obscura
Sept. 30 2014 10:10 AM A Lovable Murderer and Heroic Villain: The Story of Australia's Most Iconic Outlaw
  Double X
Doublex
Sept. 29 2014 11:43 PM Lena Dunham, the Book More shtick than honesty in Not That Kind of Girl.
  Slate Plus
Slate Fare
Sept. 29 2014 8:45 AM Slate Isn’t Too Liberal. But… What readers said about the magazine’s bias and balance.
  Arts
Brow Beat
Sept. 30 2014 10:48 AM One of Last Year’s Best Animated Shorts Is Finally Online for Free
  Technology
Future Tense
Sept. 30 2014 7:36 AM Almost Humane What sci-fi can teach us about our treatment of prisoners of war.
  Health & Science
Bad Astronomy
Sept. 30 2014 7:30 AM What Lurks Beneath The Methane Lakes of Titan?
  Sports
Sports Nut
Sept. 28 2014 8:30 PM NFL Players Die Young. Or Maybe They Live Long Lives. Why it’s so hard to pin down the effects of football on players’ lives.