If you’re mailing a letter today, don’t forget to add the extra one-cent stamp to meet the new postage rate of 42 cents. You might also take a moment to ponder the future of the U.S. Postal Service. According to Charles Guy, a former USPS economist who emailed a commentary to me and to other media outlets, the future holds rising pension costs, more rate increases and a rather bleak prospect for fiscal stability.

Congress has essentially limited first-class rate increases to the rate of inflation, but Guy says it has to come up with $50 billion to fund pensions over the next decade. He adds:

That leaves it only two ways to cover costs: lowering the amount spent on labor or introducing new products that will increase revenue. The Postal Service’s track record with new products has not been a good one.  There’s no getting around it — the Postal Service has to find ways to reduce its labor costs substantially.

Guy is writing for the Lexington Institute these days. Another Lexington researcher, Robert Schrum, has been posting regular (and usually downbeat) assessments of postal finances.

There is a way out, as I’ve written before, and that’s to privatize the Postal Service. It’s worked in Japan and Germany, among other places.