Comments on: $1 postage stamps by 2030? Postage goes from 41 to 42 cents May 12

By: Davis Freeberg

Davis Freeberg — Thu, 14 Feb 2008 16:12:47 +0000

2030 seems a little far out to me, but then again I can’t believe that its already 2008. I’ll peg my prediction for a $1 stamp for 2022, but I have to warn you that I’m already on record that I think they’ll stop producing the penny by the end of 2012. I’m not sure how that would affect stamp prices, but between the weakening dollar and the rising cost of commodities, it doesn’t make a lot of sense to keep paying 2 cents to manufacture a penny.

By: Andrew Ferguson

Andrew Ferguson — Thu, 14 Feb 2008 15:56:56 +0000

I think 2030 is a pretty good guess. If you extrapolate based on the past 20 years of inflation, I calculated that we’ll hit $1 stamps around 2034.

By: TDavid

TDavid — Thu, 14 Feb 2008 13:18:48 +0000

Kevin - mentioning the profitability is important. They are doing this to stay profitable. If only all government programs ran this way.
Davis - we’re going to stockpile some Forever stamps as well.
Andrew - fair point that the money should stay fairly relative.

No predictions of when we’ll see the $1 stamp? Agree/disagree with my prediction of 2030 or earlier?

By: Andrew Ferguson

Andrew Ferguson — Wed, 13 Feb 2008 20:50:11 +0000

It’s a bit unfair to compare prices of the same good from two different time frames in nominal dollars. You need to account for inflation and use real dollars.

For example, that 20 cent stamp you bought in 1981 would cost you 46 cents cents in todays dollars[1] when you account for inflation.

Interestingly enough, the 10 cent stamp you bought in 1975 would only cost 39 cents and the 4 cent stamp you bought in 1958 would cost 29 cents in todays dollars.

I’m not exactly sure why the real cost of sending mail increased between 1958 and 1981, but I would guess it has to do with economies of scale (the USPS ends up being too big for it’s own good), the increased volume of mail and the increased cost of gas.

[1] Actually 2007 dollars. Source: http://www.bls.gov/cpi/

By: Davis Freeberg

Davis Freeberg — Wed, 13 Feb 2008 16:17:35 +0000

I’ve stocked up on the forever stamps for just this reason, although it probably doesn’t really make financial sense to do it. For each stamp that you keep locked in your desk each year, you’re giving up about 2 and a half cents in interest. If it takes another 27 year before the price doubles again, then it means that I’ll end up paying $1.10 for what would be an .86 cent stamp. I could always spend the stamps faster, but if postage doesn’t keep rising by 2.5 cents per year, then I would be better off keeping the money in a checking account and paying current market prices.

By: Kevin

Kevin — Wed, 13 Feb 2008 15:49:46 +0000

The funny thing is that the US Postal Service is the one branch of government that is actually profitable. They don’t even need to raise prices, but they got authorization last year to do yearly increases to “adjust for inflation”.

The federal government requires USPS to hold a certain amount in savings at all times. Over the years, whenever they were short on cash, Congress has literally gone in and ‘borrowed’ from USPS savings to fund their pet projects. So any money that USPS makes, and holds in their savings account, Congress steals it from behind their back.

For any business like ours that deals primarily with e-commerce and shipping packages all over the country, that means a rate hike is almost inevitable every year.