A New York Times article (Sept 5, 2011) describes the financial crisis at the US Postal Service, which saw volumes decline by 22 % in the alst five years and is estimated to loose another 30 % of volume in the next 9 years.  Proposals to solve the operations problems include shutting post offices but sharing facilities with retailers, delivering to customers on behald of FedEx and UPS, cutting sorting facilities from 500 to 200, delivering wine and beer etc. Current laws prevent the Post Office from acting as banks or selling insurance, as they do in Europe.  Should the US Postal system be treated as an externality, like roads, and thus be treated as part of society’s competitiveness in enabling firms to operate at low price points ? How should local delivery costs be factored into calculations regarding the best way to reform postal service operations ? Should the Postal service be permitted to increase the scope of its operations to improve overall finances ?