Post Office

America Doesn't Need a Government-Run Postal Service

It's time to downsize or, better yet, privatize.


Even parts of government that look like a business never get run with the efficiency of a business. Just look at the post office.

They buy commercials and tout their services the way private businesses do. They offer a service that customers want.

But a real business can't get away with losing billions every year. (I guess in the era of bailouts, I should say shouldn't get away with it.) The post office lost $16 billion last year, despite having all sorts of advantages that most private businesses don't have.

They have a near monopoly on first-class mail delivery. You want to deliver something to someone? You better not put it in their mailbox—that's illegal. The U.S. Postal Service doesn't pay sales tax or property tax. They don't even pay parking tickets.

With advantages like that, how do they lose money?

They are part of the government, under the thumb of Congress, and that invites calcified, inefficient behavior.

"We are expected to operate like a business, but Congress has not allowed us the flexibility to operate like a business," said Postal Service Board of Governors Chairman Mickey D. Barnett on my TV show. It's all "part of being a quasi-governmental entity. That's how the cookie crumbles." Barnett added that the post office has "union contracts that have no layoff provisions."

Reality is at odds with the proud claim on the post office's website that "Since Ben Franklin … the Postal Service has grown and changed with America." But it's barely changed. You don't tend to see change in "quasi-governmental entities." You see stagnation.

This year the post office tried to limit Saturday delivery to save money. But Congress forbade the change. The politicians' constituents like getting their mail six days a week.

"They don't want a cut in Saturday delivery," Rep. Alan Grayson, D-Fla., told me.

"The USPS does need reform," Rep. Sam Graves, R-Mo., told the Kansas City Star. "However, reducing core services is not a long-term plan. I worry that reducing services will lead to other reductions like closing rural post offices."

But the post office should do both. The government maintains hundreds of tiny local post offices, each of which brings in less than $700 a month. Running those offices costs much more than that. Some are just one mile away from other post offices.

People like "universal service," which has been taken to mean that every American must get mail service, no matter how deep in the boondocks they live. The post office even hauls mail by mule to the bottom of the Grand Canyon.

"The post office provides something that's extremely valuable and has to be maintained, and that's universal service," Grayson told me. "There are countries a lot poorer than the United States, including the Congo … that try to provide universal mail service to everybody. … People don't want post offices closed!"

On the floor of Congress, Sen. Al Franken, D-Minn., proclaimed that universal service is required, saying, "It's in the Constitution."

But it's not. The Constitution says, "Congress shall have the Power to … establish Post Offices." But it doesn't have to use that power.

Cato Institute budget analyst Tad DeHaven argues, "People living in rural America aren't living there by force. … Go back to history. Private carriers picked up the mail from the post office and took it the last mile, or people came to the post office and picked it up."

And private alternatives are much better today. We have e-mail. UPS delivers 300 packages a minute and makes a profit. Federal Express, UPS and others thrive by finding new ways to cut costs. They don't do it because they were born nicer people. They do it because of the pressure of competition. They make money—while the post office loses $16 billion.

Why not just privatize it? No more special government protections, no limit on competitors offering similar services.

Then mail service would be even better than before. The market delivers.

NEXT: Lid of Boston Bomb Pressure Cooker Found

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  1. “People don’t want post offices closed!”

    Speak for yourself. Somebody really needs to think of a (legal) way to make the USPS feel the pain of the junk mail tsunami that they unleash on our mailboxes every week. Any ideas?

    1. Yes,

      Set them free.

      Turn it into a business and give all the shares to the Postal Workers Unions, of course we will have to end their monopoloy on letter delivery for the sake of fairness.

      1. Well, yes. But I meant now, since nothing is going to change for the foreseeable future.

      2. Start working at home with Google! It’s by-far the best job Ive had. Last Wednesday I got a brand new BMW since getting a check for $6474 this – 4 weeks past. I began this 8-months ago and immediately was bringin home at least $77 per hour. I work through this link,

    2. It’s not a pain. They sell spamming people’s mailboxes as a service. You don’t have to know everyone’s address to send them junk mail, you just drop off a bundle of your junk and they address them and deliver them out for you. Basically the same system as the Chinese food menu guy.

    3. Those people would be the postal workers, barely pretending to do their phony-baloney jobs.

    4. If the post office were privatized we would still get junk mail.

      1. If there were different services I can sign up for, then I’ll choose one that doesn’t deliver junk mail. Or one that sends me coupons that I prefer.

  2. Fighting any change in the USPS status or operations demonstrates that progressives are fundamentally reactionary.

  3. People living in rural America aren’t living there by force.

    Not only that but in rural America most goods and services are considerably cheaper than urban America, starting with land. But somehow I am supposed to subsidize their utilities, internet and mail services because it would cost them more if they paid the full cost. Let’s see how well things go if it is suggested that rural Americans start subsidizing my house payment.

    1. Brody. I can see what your saying… Earl`s blog is amazing, last friday I got themselves a Jaguar E-type since getting a cheque for $4865 this-past/five weeks and-in excess of, ten grand this past month. this is certainly my favourite job Ive ever had. I actually started five months/ago and straight away startad bringin home at least $87 per-hr. I work through this link
      (Go to site and open “Home” for details)

  4. But it’s not. The Constitution says, “Congress shall have the Power to … establish Post Offices.” But it doesn’t have to use that power.

    Even if it did, that still wouldn’t mean universal service. RFD didn’t begin until 1896.

    1. It means nothing. The Constitution calls for Post Offices, and the Congress half-assed spun them off.

      There is no Constitutional mandate for a public utility, yet we have the Tennessee Valley Authority. (and before anybody cites A1S8, cite and quote the clause that mentions a damn thing about “navigable waterways”)

      1. And we should get rid of both.

  5. Simple question:
    When’s the last time anyone actually visited a post office?

    I know it’s been years for me.

    1. Several years. At this point, I would pay several dollars more to ship something via FedEx or UPS just to avoid dealing with them.

    2. “Simple question:
      When’s the last time anyone actually visited a post office?”

      In my small town, there is no mail delivery, so if you want mail you have a PO box.

      1. Wait, did they close your rural post office!? THOSE BASTARDS!

    3. Just a couple months ago. They have an automated kiosk machine that can weigh your package and print out a paid mailing slip for it. It’s actually pretty convenient, although my impression when I was there was that most people had no idea what it was for. Someone actually asked me while I was using it, “You can mail things with that??”

    4. Every time I come back from a trip, to pick up my held mail. Unlike you fatcats with your massive mailboxes, I have just a tiny box and it won’t fit two weeks worth of junk.

      Hmmm, tiny box that junk won’t fit into. That sounds like a metaphor for something…

    5. I do a few times a year when I make the mistake of buying something that only ships USPS and I can’t take the day off work to sigh for a package and get one of those stupid pink notes and have to go pick it up.

      1. Did this today.

        The only time I ever went “on the reg” was about 20 years ago when they made those awesome foam airplanes that came in a bag.

    6. Monday, and it sucks at least as bad as the last time you were there.

  6. “Sen. Al Franken, D-Minn., proclaimed that universal service is required, saying, “It’s in the Constitution.””

    It’s a good thing that idiot has a staff to look it up for him.

    1. First and last time he’ll ever refer to the document.

  7. As with all traditionally public services, you must ask if a private system would be overall cheaper and, importantly, as universally provided. It’s clearly not the case with healthcare, absurd to think it would be the case with education. Mailing and shipping? I’m not gonna take Stossel’s word on the matter, that’s for fucking sure.

      1. Reading John Stossel is about a productive a use of time as poking one’s eye with a wet noodle.

        FedEx will replace the Post Office in terms of utility when every home, apartment, and business has a FedEx drop, at which point FedEx becomes another postal service, and probably loses lots of money even without the help of Congressional Republicans bankrupting it on purpose.

        Yeah I’m assuming universality is a good thing. I get that libertarians think there should be no universal services. Why that would be better I don’t understand.

        1. Tony| 4.17.13 @ 1:11PM |#
          ‘Reading shithead’s comments is about a productive a use of time as poking one’s eye with a wet noodle.’

          Get lost.

        2. poking one’s eye with a wet noodle.

          We don’t need to hear anymore about you and White Indian’s limp sexcapades.

        3. I get that libertarians think there should be no universal services. Why that would be better I don’t understand.

          Universal services require a misallocation of resources. Misallocations of resources are bad. Therefore, universal services are bad. QED.

          1. Are you mocking libertarians or is this the argument?

            At the risk of responding to sarcasm, the point is that if a service is considered good to be available universally, then any allocation of resources that doesn’t lead to universality is a misallocation in need of correction.

            You’re putting value on the wrong thing. Satisfying the needs of human beings is a goal worth allocating resources for, by whatever means achieves it best. Satisfying an OCD tick requiring market purity is somewhat less important a goal. Not to mention the argument is a tautology. Not to mention it tends to conveniently exempt those universal services libertarians are OK with (protecting their property rights, e.g.).

            1. In this context, people usually assume efficiency is defined in terms of meeting needs with scarce resources, not meeting arbitrary criteria, like universality. Criteria like that usually assume that their attainment is good regardless of cost, which is hardly a description of efficiency.

              And how do you establish that universality is best? Surely, someone shouldn’t be able to move to Antarctica, and demand power, water, and postal delivery for the sake of universality. Providing him with those things would be much less efficient in terms of scarce resources, when compared to, say, moving him from Antarctica to the US.

              It’s not about idealogical purity. Maybe someone should use the price information of power, water, and postal service for living in Antarctica as a price signal, indicating it’s silliness. Universality = silliness like this in many cases.

        4. Why do you need “universal” postal service, when technology like email renders it obsolete? Doesn’t the government encourage consumers to go paperless?

          If Fedex replaced the current system, then they would actually have to mind how much they’re spending, or actually care about what the customer wants. That’s what privatization comes down to. The US postal service lost money on unsustainable pension, and they don’t money on their services for reasons Stossel explored, which you clearly ignored.

          “Universality” does not equate quality. Making EVERYONE eligible for something that’s in limited quantity or serious decline helps no one. Sane people don’t actually believe cramming 50 kids into a classroom and blocking them for choice is a great thing because teachers insist that “we have to help everyone”.

    1. For the longest time, rural service was provided by private contractors. My grandparent’s mail was that way for decades. They didn’t get an actual postal address until the 70s.

    2. Fail troll doesn’t know who Lysander Spooner was.

      Then again: “I get that libertarians think there should be no universal services.” Classic Tony playbook.

  8. I do think USPS is obsolete and needs to go away, but in their defense I think they lose money more to our borrowing problem in general. The reason we couldn’t get Saturday service cut is that the $16bn loss isn’t directly felt by people like not getting their coupons on Saturday so they can use them on Sunday’s grocery day. Of course those idiot’s don’t realize that the $5 a week they save on groceries is nothing compared to the taxes and loss of value in their money due to inflation.

    If we can eliminate debt based spending and force the budget to be covered by taxes to where the USPS can say “we either need to drop Saturday service or increase taxes by 2%” there would be a much different reaction.

  9. I’m sure the USPS is inefficient. What I’m not convinced of if whether an efficient service would meet the core needs of the society. At the moment, the USPS is the bottom line communication net; contrary to what many of us on the Net believe if we don’t sit down and think about it, there are one heck of a lot of people with little to no contact with the Net. Some of them, in the deep country, really don’t have access. Others don’t know how to communicate using a computer, and are to old to learn.

    Show me that whatever replaces the USPS will continue to deliver letters to North Rectum, Montana no matter how much this service loses, and we can talk. Until then, I think that delivering the mail is one of the core functions of government.

    1. I actually agree with that sentiment.

      There are still countless rural communities throughout the US that are more “off the grid” than most people firmly ensconced in modern technology understand.

      I’m not saying that we can’t come up with a better alternative than the current USPS system, but it needs to be thought out better than just throwing the USPS under the bus and hoping that everything everything works out for the best.

    2. If the Post office itself actually guaranteed delivery to every residence in America, I might sympathize with your position a little more. But they don’t and they are not so hot on delivering where they feel like it either.

      It is not a basic function of government and needs to be done away with. Others will provide delivery services anyway.

      Related note: Which roads are better? The private one in your subdivision or the government roads leading to it?

      1. That usually depends largely on how old the subdivision is. I have seen it go both ways.

      2. The USPS did once delve pretty much everywhere, but the part-privitized nonsense we currently suffer screwed that us royally. I think that both die-hard libertarians and rabid statists can probably agree that anything that is part- or pseudo-private is likely to be the worst of both worlds.

  10. Sorry, did not intend to double post.

  11. Caleb. although Matthew`s posting is unbelievable, last monday I bought a gorgeous Bugatti Veyron after having made $7185 this munth and-a little over, $10 thousand this past-month. it’s by-far the most comfortable job I have ever done. I started this five months/ago and almost immediately started bringin home minimum $80 per/hr. I use the details on this web-site,

  12. I’ve been to Supai, AZ where the mules and ponies deliver mail to the town center of this Native American village. Fact is, everything in the store is delivered for stocking via USPS, canned goods, fruits and veggies, and all the other items in the small general store there.

    Let’s privatize the USPS and watch it transform itself into a better competitor to the others. I have every confidence they will then get their act together. As it currently stands, not only do they not pay property taxes, parking tickets and sales taxes, they don’t pay social security taxes or other retirement coupons (kept off book from the USPS) and they don’t pay a mortgage on the federal buildings they occupy. It’s almost impossible to even track all of the costs they don’t incur that burden their private counterparts.

  13. A lot of misinformed people here. People that don’t bother to even attempt to look something up before puking your ignorance out for all the world to see. Making rural America out as some kind of scapegoat here is ridiculous. A lot of living in rural areas are doing so to get away from the ridiculous mess that is our government. We are not the problem. As for the USPS and rural areas!?! Most of us in the moutain west HAVE NEVER HAD MAIL SERVICE. We have to drive to P.O. boxes and in some cases pay to even have a box. Does anyone here including the author believe if we closed down rural post offices completely we would suddenly make up 16 billion dollars.

  14. Some have proposed that USPS charge a small amount for every email delivered.

  15. If you think Shawn`s story is impossible…, four weeks ago my auntie’s boy friend basically also earned $6530 putting in a twenty hour week from there apartment and their neighbor’s half-sister`s neighbour has been doing this for 3 months and got more than $6530 in their spare time On there laptop. apply the steps from this address,

  16. If your business had to pay pensions decades in advance, for employees who are not even born yet right now, you’d be going under too.

  17. Any business run by the government runs inefficiently because they have no incentive to make a profit. But they have an incentive to keep their unions, rather than their captive customers, happy. A recipe which ensures government failure. Let government handle government and leave business to business.

  18. I’ve had issue after issue with FedEx and UPS deliveries, even with polite (and occasionally less than polite) feedback, the issues persist. I hate to say it, but USPS gives me the best service. I think what it really needs is to be allowed to be run like a business. No more congressional interference in prices would mean no more idiotically high deficits, which means no more bailouts.

  19. Personally I’d rather do without mail service. Junk mail so overwhelms regular mail that anything important is likely to be lost. Everything I can I’ve switched to electronic format. We have do not call registries can I get a no junk mail registry?

  20. Impossible to privatize. Too many important things rely on postal services for it to either be privatized or delayed. Loans, subpoenas, etc. You also cannot simply say “No one forced you to live in the middle of no where, tough luck.” and be smug about it and that’s that.

    What they really need to be doing is using rates based on distance. There are piles of ideas on how to do this, but the bottom line is, it needs to be done. Rates cannot be the same for every single letter, we know that much.

    1. Funny, FedEx and UPS built their reputations on being *more* reliable than the USPS — they’re just prevented by law from carrying first-class letter mail. You have to make anything you want to send into a “package,” even if it’s only a thick cardstock mailer.

  21. before I saw the check which had said 4615, I didn’t believe that my mother in law had been actualy bringing home money parttime on their computer.. there friends cousin has done this for under 21 months and at present repaid the mortgage on their appartment and purchased a new Lancia Straton. this is where I went,

  22. The thing that most frustrates me about the current setup is that UPS and FedEx refuse to deliver to my PO Box. I live in a very rural area and have a long dirt driveway. The delivery trucks hate coming down it, and in the past, they’ve dropped off packages left out in the elements — even packages stamped all over with “Sensitive Biologicals! Keep Cool!” without even trying to come to the door.

    I have the PO Boxes, because any packages there are kept safe and dry. But, the antagonism between the USPS and the package services mean that my plan is useless for the vast majority of packages, which only ship via FexEx or UPS — I’ve had to arrange with the owners of a local mini-mart to accept packages for me. This isn’t their main business model, but they do it out of friendship. The arrangement still causes confusion every time there’s a new driver who doesn’t know about the arrangement.

    If my post office was privatized and had incentives to accept packages from all comers, that wouldn’t be an issue.

  23. I remember a liberal friend of mine telling me that a public option in health care would be like the USPS: providing a cheap, government option, that helps keep prices down in the market. When I pointed out to him that the USPS has had a government ensconced monopoly on first class mail and letter carrying since it’s existence, that Lysander Spooner was forced to stop competing with the USPS in the 1800’s, and that the reason it’s in such trouble now is a great example of how monopolies really aren’t that great, he didn’t believe me. I had to forward him links to wikipedia.

  24. Anna. although Richard`s artlclee is nice, last monday I bought themselves a Mercedes after making $7877 this munth and-just over, 10 grand this past-munth. this is really the nicest-job I’ve ever had. I actually started 4 months ago and practically straight away began to bring home over $78… per-hr. I work through this link
    (Go to site and open “Home” for details)

  25. A-Yes, the USPS is losing money, but Stossel makes no mention of 2006’s “Postal Accountability and Enhancement Act” which forces the Post office of pay up front some $5 billion each year for retirees not yet employed even. Something that no other govt. or private agency is required.

    Where was Stossel when this was passed? That he doesn’t even mention it shows total dishonesty.

    B-The whole article rests on the silly tired idea that a govt. entity would be inefficient because it doesn’t need to make a profit, but in this case the USPS DOES need to make a profit since it is largely self-funded.

    C-For an “inefficient” agency, it seems to be doing very well handling the largest volume of mail in the world. And has been doing so for close to two and a half centuries. That’s an awfully long life for such a “sickly inefficient” agency.

    D-The idea that private services would be better is completely baseless. In terms of service, something like Fedex is barely faster than USPS. Certainly not much faster as to justify the huge price differences.

    I recall wanting to ship a small box over-seas to Europe. Fedex wanted $350. UPS wanted close to $400, prompting the UPS cashier himself to tell me to go to the Post Office. The Post Office took just under $80, and the box arrived just a day later than what Fedex and UPS estimated (6 days versus 5 days).

    But to Stossel that’s apparently better for the consumer.

  26. uptil I saw the paycheck that said $6982, I accept that…my… best friend was like truley bringing in money part time at there putar.. there uncles cousin has been doing this 4 only about fourteen months and a short time ago repayed the loans on their house and got a great Alfa Romeo. this is where I went,

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