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Privatizing the U.S. Postal Service
From the Editors
A paper published by the Cato Institute makes the case for privatizing the postal service.
Written by Tad DeHaven
The following is the overview of the paper:
"The U.S. Postal Service is a branch of the federal government. It is headed by a Postmaster General and a Board of Governors, with further oversight provided by the Postal Regulatory Commission. However, ultimate authority over the USPS rests with Congress.
The USPS is structured like a business in that revenues from the sale of postal products generally cover costs, and it receives virtually no federal appropriations.1 The organization is the second-largest civilian employer in the United States—after Wal-Mart—with about 600,000 workers. If the USPS were a private company, it would rank about 28th on the Fortune 500 list of largest companies.
While the USPS is structured like a business, Congress often prevents it from actually operating like a private company, such as taking actions to reduce costs, improve efficiency, or innovate in other ways. The agency is also obligated by statute to provide mail services to all Americans, irrespective of where they live and the cost of serving them. Furthermore, it is required to deliver first-class mail at a uniform price throughout the nation.
While Congress imposes various costs and obligations on the USPS, it also protects it from competition. The USPS has a legal monopoly over first-class mail and standard mail (formerly called third-class mail). Thus, we have a postal system that encourages high costs and inefficiency, while preventing entrepreneurs from trying to improve postal services for Americans.
The USPS is in deep financial trouble as a result of declining mail volume, bloated operating expenses, a costly and inflexible unionized workforce, and constant congressional meddling. At the same time, electronic communications and other technological advances are making physical mail delivery less relevant.
America’s postal system needs a radical overhaul. This essay discusses the problems of the USPS and looks at some recent postal reforms abroad.2 It concludes that taxpayers, consumers, and the broader economy would stand to gain with reforms to privatize the USPS and open U.S. mail delivery up to competition...."
| Give the day worker standing in front of the Hardware store 45c and have him deliver your letter across the country. Good luck with that. |
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| Jim - Dec 10, 2011 10:22:48 PM | Remove Comment |
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| our post office is established in the consitution. privatize it will only look out for their profits not the benefit of the american peopleanother coporation. |
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| jersey e satak - Dec 05, 2011 03:54:56 PM | Remove Comment |
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| If they just delevered letters and left the packages to others they could probably break even. We could also do away with Saturday mail. |
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| Ron - Dec 29, 2010 12:49:58 PM | Remove Comment |
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| The United States Postal Service, , USPS, which before Nixon was commonly referred to, et al, as the U. S. Mail, was removed from complete government control in the mid 1960s. As of this writing, the USPS, continues to issue humongous bonuses to its executives, and to postmasters across the width and breadth of the nation. When the USPS made financial aid requests to congress following the anthrax through the mail problem of several hundred million dollars, they STILL paid those bonuses out, when that bonus money was badly needed to uphold additional, unplanned for, expenses . Had bonuses NOT been paid via the semi privatization operating model the USPS over several preceding years of operation, and that bonus money turned back into the daily operation of the USPS, that request would most probably not had to have been made, or the request would have been much less in value. The history of converting former government agencies to privatization ALWAYS results in the private sector skimming profits off the gross income first, before any other operational requirements are honored, and that skimming is most always in the form of bonus payouts. The USPS needs to revert to more government control, not less, and the bonus money paid out to executives and management, needs to be placed back into the operational needs, which will allow for lesser postal costs, not more. |
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| MainStreet Mentor - Dec 25, 2010 09:12:57 PM | Remove Comment |
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| I remember when our hospitals were operated by city, county and state
authorities. We were told privatization would lower costs and improver services. Lower costs?
what a crock we were fed. |
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| bob healy - Dec 25, 2010 02:09:03 AM | Remove Comment |
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| What is especially amusing, and unmentioned by the author, is that all the countries he lists that have "privatized" their Postal systems charge more for postage than USPS does. Even if USPS could raise it's rates tomorrow to meet actual costs, it would still be less than what Postal customers pay in those other countries. Plus, even though "privatized" many of these countries still subsidize their Postal systems, essentially transferring public funds to private hands. Contrast our situation in the USA, where the USPS actually subsidizes the Federal Government through its mandatory overpayments to OPM and assumption of "revenue forgone" costs. |
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| Bob - Dec 24, 2010 06:41:49 PM | Remove Comment |
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| the privatized postal system is well over due it will save all of ue money |
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| Don Williams - Dec 24, 2010 12:16:29 PM | Remove Comment |
