The U.S. Postal Service has recently made public — with extraordinary media coverage — what policymakers and business mailers have long known: USPS faces severe, unprecedented threats to its continued operation.

The causes are clear. USPS suffered a $3.8 billion net operating loss in the fiscal year ending Sept. 30, 2009, expects to lose between $6 billion and $7 billion this fiscal year, and projects losses exceeding $25 billion over the next 10 years. This desperate state is due to the recession and, more important, the loss of business to electronic channels of communications that are sexier, cheaper and faster.

Postmaster General John Potter announced that major reforms are needed to restore USPS' financial health and enable it to operate for "centuries to come." Most of these proposals are controversial; many should not be.

USPS is the largest civilian employer in the U.S. after Walmart, and has 36,000 post offices — roughly equivalent to the number of outlets operated by Walmart, Starbucks and McDonald's combined. With volume and revenue sinking, closing some of these outlets is an obvious need. USPS would love to close underutilized outlets, but voters and politicians object whenever USPS tries, proclaiming their local post office a "community center," not a retail outlet.

This viewpoint is absurd. While postal statutes describe USPS' mission as "binding the nation together," that cannot mean a stand-alone post office in every city block, subdivision or hamlet. Birth announcements, wedding invitations and postcards sent from the bottom of the Grand Canyon represent a tiny fraction of mail, and the nation does not need 36,000 offices to mail or pick up this correspondence.

The first step in slicing away the gloom that envelops the Postal Service is to let go of the romantic myths that have too long swaddled it. USPS can no longer afford to preserve an oversupply of undersized offices that the public admires in the abstract but is no longer willing to pay for. USPS is an economic enterprise that imposes real costs on our citizens. As such, it should have a relatively free hand to decide when and where to place its stores, without micromanagement by Congress or regulators.

The alternative to cutting USPS' costs is to raise prices, which would only make matters worse. The postmaster general and others have floated the idea of raising rates to offset or at least reduce current and anticipated deficits. But price increases would only hasten the death spiral. They would quickly drive more mail from the system, making additional increases necessary. Unchecked, the process would repeat until the postal system collapsed.

USPS recognizes the inherent risks of a rate increase: The postmaster general has said that any rate increase must be "judicious." However, there is no way to know in advance how large is "judicious." USPS lost 4.5 percent of its total volume in 2008 and another 12.7 percent in 2009. Some of this may be a temporary effect of the recession, and the volume may return when the economy recovers. But there is no way to know how much of the lost volume was captured by the Internet, or how much of the remaining volume is close to bolting, too. If the USPS overestimates how big a price increase mailers will tolerate, the volume and revenue lost to electronic channels will likely be gone forever. Trying to achieve financial solvency by soaking commercial customers is a bet USPS cannot afford to take.

The famous inscription on the main post office in Manhattan proclaims that the gloom of night and nasty weather will not stay USPS from the swift completion of its appointed rounds. The current outlook is certainly dark and gloomy. But USPS may yet continue its appointed rounds if we unshackle it from its burdensome mythology and shun quick fixes that fix nothing.

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David Levy and Ian Volner are partners in the law firm Venable LLP. Their clients include business mailers, nonprofit organizations and postal trade associations.