teapartyeconomist.com / By Gary North / February 7, 2013
When a profit-seeking firm sees that no one wants its services, it finds ways to lower prices and improve services.
The United States Postal Service does what government agencies do: it raises prices and cuts services.
In its press release announcing the cessation of Saturday delivery of mail in August, we learn the following.
WASHINGTON — The United States Postal Service announced plans today to transition to a new delivery schedule during the week of Aug. 5, 2013 that includes package delivery Monday through Saturday, and mail delivery Monday through Friday. The Postal Service expects to generate cost savings of approximately $2 billion annually, once the plan is fully implemented.
Let’s analyze this. It will save $2 billion a year. What is its budget? The press release has this is at the end. “With 32,000 retail locations and the most frequently visited website in the federal government, usps.com®, the Postal Service has annual revenue of approximately $65 billion and delivers nearly 40 percent of the world’s mail.” So, the $2 billion in savings is 3% of its budget. So, to save 3%, it reduces its delivery of mail by 16.6%.