On Sunday, the price of first class postage stamp will increase by one cent, and overall postage rates will go up by an average of 2.9 percent. The increases are expected to bring the U.S. Postal Service an extra $1 billion in annual revenue.

The USPS enjoyed about $60 billion in revenue last year. Critics wonder whether the additional $1 billion will go to improve service or be used to fight competition from private delivery firms. They also note that over the years the price of stamps has gone up, while prices have dropped for other forms of communications.

• Since 1970, the price of a first class stamp has gone up 10 percent in real terms, according to the Hudson Institute and the Federal Reserve Bank of Dallas.

• But the cost of long-distance phone calls has dropped 88 percent and, since 1984, the cost of cell phones has declined 98 percent.

• Moreover, the USPS pays no federal income tax, no state income tax, and no property taxes on the property it owns.

• The USPS lost $84.7 million from 1995 to 1997 on nonpostal products such as merchandise sold in Postal Service retail stores, according to a General Accounting Office report.

A USPS spokesman states that there is "no service we offer that isn't up against competition." That being so, free-market advocates point out, there is really no need for the government- owned outfit, since private businesses can perform its services -- usually more swiftly and efficiently.

Other countries have started to privatize their postal systems or allow more private competition. New Zealand and Sweden have abolished their postal monopolies. The German government will do away with its postal monopoly at the end of 2002. The Netherlands has sold a majority of its post office to the private sector -- although it let its monopoly on some letter deliveries stand.

Source: John Berlau, "Higher Postal Rates Questioned," Investor's Business Daily, January 8, 1999.