The “Forever Stamp”
The United States Postal Service has released the “forever stamp”. A forever stamp can basically be thought of in the same way as a rent-controlled apartment in New York City – the price will always remains the same, regardless of the state of the local market. If a consumer buys a forever stamp then the consumer will theoretically be able to use the forever stamp five years from now when the cost of postage will be much higher. According to USA Today, more than two dozen countries, including France and Finland, have used this type of stamp.
The forever stamp is expected to contain its share of advantages for consumers and the USPS alike. Consumers that purchase the forever stamps will no longer have to waste their time buying 2-cent stamps at the post office every time there is a price increase in the future. The forever stamp would also raise revenue for the postal service at a time when the USPS would not hurt from a financial shot in the arm.
The USPS is currently contending with fluctuating fuel prices, as well as the rising costs of health insurance. According to the Washington Post, when the price of gas goes up by 1 cent, this will cost the Postal Service $8 million per year. On the healthcare front, the USPS employs roughly 700,000 people and spends about $6.6 billion insuring all of them. Unlike other government agencies, the USPS’s $69 billion annual budget is funded strictly by operating revenue, as opposed to taxes. The USPS must also put about $3 billion worth of revenue into a congressionally mandated escrow fund. All of these factors contribute to the necessity of increasing postage rates.
The USPS has raised the cost of postage at least 13 times since 1974.. Many experts predict that price increases may become an annual affair – as they are in many other industries. This may make forever stamps that much more attractive in the future. However, like most big ideas, the devil is in the details.