Government vs. Private Enterprise

In a nutshell here is the difference between government run enterprises and real businesses. A real business faced with a drop-off in demand for their products would move to cut expenses (close plants, layoff workers) and reduce prices to attract more sales. A government enterprise faced with a drop-off in demand, in this case the US Post Office, and this despite an enforced monopoly on delivering first class mail, chooses to raise prices to make up the difference. That will certainly encourage more people to use the mails rather than email, electronic bill pay, and all their other alternatives. Welcome to government run business. I can't wait until GM doubles their car prices to cover their pension and healthcare costs. I'm sure some bureaucrat keeps thinking "Gee, we keep raising our prices but our revenues keep dropping, what could possibly be wrong?"

The U.S. Postal Service has proposed increasing the price of a first-class stamp by another 2 cents in the face of slumping mail volume.

If approved by regulators, the increase to 46 cents for a standard letter would go into effect Jan. 2 and be the seventh increase in a decade. As of Jan. 7, 2001, the cost of a stamp was 34 cents.

The Postal Service said it has faced "plummeting mail volume traced to the recession and increased use of the Internet," resulting in a projected deficit of nearly $7 billion for the fiscal year starting Oct. 1. The proposed increases would raise about $2.3 billion for the first nine months of calendar 2011.

"There is no one single solution to the dire financial situation that the Postal Service faces," said Postmaster General John E. Potter. "These proposed rate adjustments are moderate and part of a fair and balanced approach to ensuring mail service for all Americans well into the future."

The price to mail a postcard also would increase by 2 cents, bringing the cost to 30 cents.

The Postal Service, to combat its falling revenue, also has discussed changing delivery frequency, restructuring prepayments of retiree health benefits and other measures. It said last November that its had a loss of $3.8 billion for the year ended Sept. 30 as the amount of mail volume it handled slumped 13%.