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USPS "Going the Way of the Dinosaur"

Written By: Chris Woodward  |  Posted: Wednesday, August 31st, 2011

            Now that the U.S. Postal Service (USPS) may cut 120,000 jobs, on top of closing thousands of post offices, one budget analyst says that's all the more reason why the USPS should be privatized.

            The closings and job cuts are meant to make up for a second year of $8 billion or more in losses. Although USPS management has been able to cut costs in the past, Tad DeHaven of the Cato Institute says the savings have not been nearly enough to stem the rising tide of red ink. So, the best hope for the post office, he says, is to go private.
            "The brick and mortar is going the way of the dinosaur," he explains. "Four-fifths of the Postal Service's 36,000 postal outlets are operating at a loss, so you need to cut costs. Sure -- there are those who are accustomed to going to the post office, but they're becoming the exception, not the rule."
            DeHaven points out that more people are using e-mail and paying bills online, which happen to be two of the main reasons the USPS is losing money.
            "First-class mail is [USPS's] financial lifeblood," he notes. "And going forward, the Postal Service acknowledges that mail volume will not just not return to pre-recessionary levels; it'll never return to those levels.
            DeHaven adds that the U.S. Postal Service does not get appropriations, as it is supposed to survive on the revenue it collects. As for the question of how unions might affect a privatized Postal Service, the budget analyst says it is different in the private sector because unions recognize there is a bottom line to meet.

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