Large spending cuts should be on the agenda when the next president enters office in 2017. Spending cuts would spur economic growth by shifting resources from lower-valued government activities to higher-valued private ones.
The next president will confront a range of fiscal crises that the current president has ignored. One of them is the ongoing implosion of the U.S. Postal Service (USPS). With the rise of email, the volume of snail mail has plunged, and the USPS has lost more than $50 billion since 2007. The red ink will continue to gush as more bill paying, advertising, invitations, and other communications go online.
In recent weeks, the bureaucrats at both the International Monetary Fund and the Organization for Economic Cooperation and Development have recommended that politicians should have a green light to supposedly stimulate growth by increasing the burden of government spending.
Since Margaret Thatcher’s British reforms in the 1980s, more than $3 trillion in government businesses have been privatized around the world, and few have been renationalized. Privatization simply works.
Two decades ago, the Clinton administration proposed restructuring our air traffic control (ATC) system. The idea was to create a self-funded outfit separate from the Federal Aviation Administration (FAA). The problem was that “The FAA has been a big, bungling bureaucracy,” noted the spokesman for the controllers’ union in 1994.
The U.S. Postal Service (USPS) is losing billions of dollars a year. The government company that delivers “snail mail” is losing out to email and other types of electronic communication. First-class mail volume fell from a peak of 104 billion pieces in 2000 to just 64 billion pieces by 2014.
With the rise of electronic communications, the volume of snail mail has fallen precipitously, and the U.S. Postal Service (USPS) has been losing billions of dollars. The 600,000-worker USPS is an unjustified legal monopoly that is heavily subsidized. It is a bureaucratic dinosaur that Congress should put on the way to extinction.
The federal government owns more than one quarter of the land in the nation, about 640 million acres. The holdings are concentrated in the West, where it owns about half of the 11 westernmost states.
After Germany, the Netherlands, and Great Britain, it is now Italy’s turn to privatize its postal service. It seems that even “old Europe” welfare states are more reform-minded on some economic matters than Congress and the current U.S. administration.
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