America Doesn’t Need a Government-Run Postal Service

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John Stossel

BY JOHN STOSSEL – 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.

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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.

John Stossel is the host of Stossel, which airs Thursdays on the FOX Business Network at 9 pm ET and is rebroadcast on Saturdays and Sundays at 9 p.m. & midnight ET. Go here for more info.

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19 COMMENTS

  1. What a load of crap. True, there's room for improvement in efficiency in government, but privatization is NOT the answer. Now you've just introduced greed into the equation. Now you've offered someone the opportunity to determine profit margin, which must be built into the cost of goods and services, which means you are going to pay more than you do now. Just like healthcare. Remove private insurers from the mix and watch how low rates could go, or how many more people could be insured. Ever wonder why the big push to privatize Social Security? Do you really believe for a minute that someone else wants to afford YOU the chance (read: risk) to make more return on your investment? That's right – because there's something in it for them. Which translates into less for you. It's math, folks. Simple math. Competition my @ss. Oh, and Stossel's a sellout…

  2. Got to agree with Christopher here. Privatizing USPS would be a huge mistake. Of course it is subsidized but it performs an essential function of government and commerce. Plus the historical and educational roles it serves. Most of the "losses" are due to pension liabilities–not operating costs. Although people love to rag on the postal service as an icon of inefficiency or lazy workers, in fact they perform remarkably well. Let's see FedEx or UPS deliver the volume of first class mail that USPS handles daily nation wide for $.46 Have you sent an overnight FedEx letter recently? More than $20. Most first class mail gets delivered in just a few days and often in one day. Perhaps you could double the price to $.99 per letter and still it would be a bargain. There's nothing preventing a private company from competing on letter service. If there were a market for that which could sustain commercial competition, FedEx, UPS or another upstart would already be doing it and the cost would be a lot higher.

  3. I'm shocked that John Stossel is not better informed. Privatization is simply not an option. The Postal Service delivers 170 billion items/year, to 152+ million — and the number keeps growing — addresses. FedEx and UPS — combined — deliver 7 billiion items/year, to 30 million addresses, consigning a substantial (and growing) portion of those to USPS for "the first and last mile." Without the Postal Service, the vast majority of Americans — at the 122+ million addresses not served by the private sector — would totally lack access to mail service, much less at an affordable price.

  4. impressive. UPS delivers 300 packages a minute. The USPS delivers 1,120,000 pieces of mail a minute

  5. What a bunch of lies and halftruths. Inspite of a Republican Congress burdening the USPS with financing its retirement funds for decades in the future instead of currently like other agencies, it still made a profit. If you think government run agencies are inefficient look at private health insurance with an overhead of 20-25 % while government health insurance, Medicare, has an overhead of 3-4 % ! It's all about privatizing everything then charging high rates and giving poor services and products. Don't fall for the BS from the likes of John S.

  6. the US Post Office will have to raise their postage rates.but congressrefuses to allow the postal service to do so.and if the new postal worker goes into a 401K retirement or similar plan and not the defined contribution benefit plans the employees have now,it would help.i support the post office.it is probably the only government agency with a rich and sometimes colorful history.unlike our uniformed armed and deadly and dangerous paramilitary government law enforcement police and militias,who will use violence and coercion on American citizens,our uniformed men and women postal workers productively and with pride deliver our mail peacefully.God Bless them.

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