Cutbacks in Government Services Only to Get Worse

Neither snow, nor rain, nor... Saturdays? A 150-year-old postal tradition is ending.

Free US Postal Service delivery started in 1863, when a postal stamp cost 2 cents. On Jan. 27, 2013, the price of a first-class stamp rose a penny to 46 cents. A few days later, the U.S. Postal Service announced a major cut in service.

The U.S. Postal Service announced [Feb. 6] that it plans to end Saturday mail delivery, in one of the most significant steps taken to date to cut costs at the struggling agency.

Fox News, Feb. 6

Bloomberg reported on Feb. 7 that the U.S. Mail lost $2.8 billion in 2008, the depths of the financial crisis. But even with a so-called economic recovery, losses for the nation's second-largest civilian employer rose to $15.9 billion in 2012.

And consider that a reduction in federal government services may only be the tip of the iceberg.

In states facing budget gaps, the consequences are severe in many cases... To date, budget difficulties have led at least 46 states to reduce services for their residents, including some of their most vulnerable families and individuals. More than 30 states have raised taxes to at least some degree, in some cases quite significantly.

Center on Budget and Policy Priorities, June 27, 2012

Many cities and counties have also had to scale back services.

Detroit's financial woes are in a near-constant state of emergency.

An emergency manager might be in Detroit's future, but Gov. Rick Snyder hasn't offered the job to anyone.

He does, however, have a short list of candidates ready in case a financial review team report shows there's no other option for the financially distressed city.

Detroit Free Press, Feb. 12

Much of what Robert Prechter forecast in the second edition of Conquer the Crash (p. 257) has already happened -- but not all:

Don't expect government services to remain at their current levels. The ocean of money required to run the union-bloated, administration-stultified public school systems will be unavailable …. School districts will have to adopt cost-cutting measures, and most of them will result in even worse service... The tax receipts that pay for roads, police and jails, fire departments, trash pickup, emergency (911) monitoring, water systems and so on will fall to such low levels that services will be restricted.

The worst of the government service cut backs may be yet to come.