The U.S. Postal Service has had better days. Electronic communication is quickly supplanting first-class mail, and the recession has pushed even devoted letter-writers toward cost-free e-mail services. Last year, the USPS saw a 13 percent decline in letters, with an attendant $3.8 billion loss. In response, Saturday delivery may be cut. Fighting the bad publicity, Postmaster General John Potter penned a defense of the Postal Service in The Washington Post. Between the signs of decline and the stopgap measures, what's the future of the USPS and the American mail system?

  • Shut It Down  The Atlantic's Megan McArdle crunches the numbers and wonders why we bother. American taxpayers annually give the USPS $23 billion in subsidies. "Probably not even worth my per-capita share of the postal service, which if my math is correct, works out to about $75 a year. And then, of course, babies and small children neither receive much mail, nor pay much in taxes. So call it $100. Would you pay $100 a year for the privilege of getting mail? Yeah, me neither."
  • Keep It For Now  The Washington Post's Ezra Klein gushes, "Frankly, I still find the existence of rapid and reliable mail delivery to be baffling and an inarguable rejoinder to those who say the government can't run complicated services efficiently." He notes that mail service still blankets even the most rural areas and is still widely used, if less so. "Within that context, the Postal Service seems to be operating pretty efficiently, but it's trapped providing a level of service to a breadth of people that can't possibly be profitable. The result will be taxpayer-funded losses and a declining level of service that will make the Postal Service look bad even as it's not doing anything wrong, or inefficiently."
  • Offer High-Level Services  In the model of the Swiss postal service, the USPS could use its massive physical network to sell banking, insurance and telecommunications services. Matthew Yglesias writes, "This seems to be basically what Postmaster General Potter is looking to do." But he notes that the USPS lacks the necessary start-up funds, suggesting a "joint venture model" could work.
  • Just Restructure Union Costs  The Christian Science Monitor advises a more modest path to sustainable costs. "The cost of labor sticks out like an oversized letter. Compensation and benefits make up about 80 percent of USPS costs. Unionized postal workers are supposed to earn wages comparable to those of their private-sector competitors, but one study shows they get a 28 percent premium. Negotiations are coming and unions will have to show more flexibility if they want the post office to survive." Congress should work with unions to bring the cost down and keep the mail running.
  • USPS Should Scan, E-Mail, Print PDFs  A commenter at economist Tyler Cowen's blog, Al Brown, suggests, "There's no need for most mail to be physically moved around. The post office can actually accept pdf files and present them to users, and only print and mail when people want a hard copy. It can also get into storage of data between you and all the entities you deal with. make all your data private, secure, searchable, dependable, protected from manipulation by either party."
  • Make Junk Mail More Expensive  Another Tyler Cowen commenter named rluser thinks that the USPS must be charging too little for the bulk rates it uses for junk mail. "Since these days most pieces move directly from my mailbox to my waste basket (and it seems most apartment complexes in cities have a bin dedicated for this task), I am tempted to think USPS is undercharging for its standard mail services and presorts," rluser writes. "A quick glance at the numbers suggests USPS has half the revenue but twice the weight from 'junk mail.'"