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Don't Buy Forever Stamps

Those "forever" stamps introduced last month by the U.S. Postal Service -- that lock in the 41-cent rate for good -- sounded like such a good deal to a Pennsylvania man, he decided to invest $8,000 in those very same stamps.

A look at the real numbers, however, shows how investing large amounts of money on forever stamps is anything but a good deal, according to this Slate piece.

The reason: Postal rate hikes have come more slowly than the true rate of inflation, as calculated by the Consumer Price Index, meaning stamps have gotten cheaper over time. And, a new law signed by President Bush late last year (the Postal Accountability and Enhancement Act) ensures postage increases will stay below the rate of inflation.

The end result is that forever stamps you're considering today, based on historic rates of inflation, would be more expensive in the long run, regardless of how high postage rates climb.

A staple in other nations like the UK and Sweden, the forever stamp may have made sense for consumers had it been introduced as late as 1971, when the cost of sending a first-class letter was just 6 cents (the same rate adjusted for inflation today would be 31 cents), just not today.

Slate May 17, 2007

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