Earlier this week, GOP presidential candidate Tim Pawlenty released some ideas on how to improve the economy. One of those ideas was to make government respect the “Google test”: If an Internet search reveals private businesses that provide a good or service, the government shouldn’t provide it as well. As an example, Pawlenty cited the United States Postal Service — a company that has a federally guaranteed monopoly on delivering letters, cannot make a profit on most of its services, and must deliver to all addresses in the United States.
Right now, the federal government is spending about a trillion dollars it doesn’t have every year. Fully privatizing the USPS won’t do much to fix that, and therefore probably shouldn’t be a priority. But it’s still a great idea.
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It’s true that the Postal Service has its roots in the Constitution: Congress is authorized to “establish Post Offices and Post Roads.” The Constitution doesn’t require Congress to do that, however, and it certainly doesn’t forbid private companies to deliver letters. The USPS monopoly on letter delivery is the result of everyday laws that can be changed whenever Congress chooses to.
So what is it, exactly, that the USPS gives us that a free market in letter delivery couldn’t? And what costs come along with these benefits?
Several liberals have claimed that while the USPS delivers to all addresses, private package services such as UPS and FedEx don’t deliver to some rural areas. The unproven assumption, of course, is that these companies still wouldn’t serve certain pockets of the market if they were allowed to deliver letters in addition to packages. But more fundamentally, the claim is simply not true: The websites of UPS and FedEx confirm that the companies serve every address in the United States, although some services aren’t available everywhere.
A more reasonable argument is that while the USPS operates lots of post offices with daily pickup in rural areas and charges one flat fee for a stamp, a private system might force people in rural areas to drive many miles to the nearest office and to pay more for each item sent. This is obviously a downside for customers who reside in sparsely populated terrain, but the question must be asked: If that’s what a free market would do, what does it say about the current system?
The truth is that if it costs more per transaction — because of the lack of economies of scale — to deliver letters and run post offices in rural areas, and yet the USPS charges the same amount, then urban and suburban customers are subsidizing letter service for country-dwellers. There is nothing wrong with living in a rural area, of course — but every lifestyle has costs, and everyone should pay the costs of his lifestyle rather than pushing them off on others.
Another benefit of the USPS is that the government’s involvement allows us to secure preferential rates for good causes — for example, magazines. I’m inclined to agree with National Review’s management that this is a good thing. I can’t say I would still believe this if my twice-monthly paychecks didn’t come from National Review.
So, what costs come along with these benefits? Fortunately, there is little direct cost to taxpayers: The USPS, in addition to being essentially forbidden to earn a profit, receives no direct public funding. If it doesn’t make some changes soon, it may default on its debt to the federal government — but its debt limit is $15 billion, about a thousandth of the current federal debt.
But speaking of default, the biggest problem with the USPS is that it simply cannot cope with the implosion of the letter business the way a private company could. Despite facing no competition, it lost $8.5 billion last year. Every time it wants to raise prices or cut services, it has to go begging the federal government for permission. And because its ability to make a profit is so limited, it has little reason to fight its union as hard as a private company would.
This will only get worse: Now that we communicate mainly electronically, more than half of all mail is junk. Even Netflix, one of the Postal Service’s biggest customers, is slowly shifting its operations online. In a decade, if that, it will be self-evident that there is no need whatsoever for a federal role in this area. To survive without bailouts, the USPS will have to close down post offices, shed employees, hike stamp prices, and possibly cut service to five days a week — a situation that looks an awful lot like the doomsday scenarios that will supposedly strike if we end the USPS’s federal privileges and obligations entirely.
The USPS is inefficient, obsolete, and redundant. Any necessary service it provides can just as easily be provided in a free market. T-Paw may have his priorities mixed up, but his proposal is a good one.
— Robert VerBruggen is an associate editor of National Review.
Editor’s note: This piece has been amended since its original posting.
The notion of full salary goverment employees delivering mail by hand is a nonsense in the 21st century.
Your idea of killing off the USPS is not alone. In the UK they would like to privatize the Post Office for the same reasons.
However, rural areas must have a service of sorts for mail. Placing Post Offices and Banks in supermarkets is one way to reduce the overhead and indeed it may be necessary for rural customers to collect their mail from such places, including bars or other licensed commercial operations in their communities - gas stations for example.
If commercial enterprise were given a subsidy based on weight of each item times a factor based on the density of population (or zipcode) then it should be more equitable to provide mail service everyhere.
In the cities, junk mail is mostly just that. Perhaps if the price to the junk sender were raised then the junk volume would fall, making the profitability per trip higher for general mail delivery in nedium to high density areas.
Similarly rural junk mail rated higher by the factor suggested above could profitably be delivered by individual part-time staff sub-contacted as they are now in the UK.
Five days? Who needs more than a couple of mail deliveries a week? Businesses may need five day delivery, but certainly not 99.99% of individuals. Those individuals needing such extensive delivery (including Saturdays) should be directed to a PO Box.
No entity needs delivery six days a week. They haven't for decades (at least). That this incredible waste continues speaks volumes about how serious anyone in Congress or ANY administration is about controlling spending.
The USPS is a welfare agency that provides occasional postal service that has been completely left in the dust by UPS, FedEx, DHL, local couriers, and the Internet. The Left may try to defend it as some fairness thing, but in reality they are defending their belief in socialism; if any of their ideas are privatized it is a testament that their ideas has failed.
My husband and I chose to live on a remote Island off of the the coast of South Carolina. There is a tiny post office on the island, it should not be there. We all have to leave the island for food, jobs and clothing. There is no reason why we can't use the nearest Post Office on the mailand. UPS delivers to my house willingly. The ups man knows to stash packages in my garage. If we are home when ups delivers we usually give them a soft drink of some kind as it is thirty minutes to the "stop and go" as you come off of the island. Why they manitain a post office on a remote Island with a small population is a mystery for me. There is not more than 1000 people on that Island. You cannot build a house unless you have five acres.
I live on a remote Island off the coast of Charleston, sc. We have a small post office on the island. Two women are employed there. One delivers mail in her own car and th other lady mans the world's smallest post office. It is just silly. We could use the post office on the other islad we have to cross to get to the main land. We have to drive right by it to get to the mainland where we all work. We don't send or receive much mail. We pay our bills eletronically and sen email to relatives and friends. I do not remeber the last time I sent a letter. The UPS man knows to put his deliveries in our garage next to the elevator. We do not need a post office on our small island. We have to go to the mainland for groceries and going to work. The only jobs on the island are shrimpers and they live here. They can close our post office and
no one would notice.
A privatized postal system will leave millions of Americans without postal service. No private companies will service smaller communities and rural areas. And I believe that Mr. VerBruggen is wrong about the Constitutional aspect. If it says "establish Post Offices and Post Roads", that means, at the very least, establish them. No option. And our founders probably meant establish and operate them. Hard to know for sure, don't know if there's anything written on this, but they wouldn't have put it in there if they didn't think it was important enough for our national government to do.
I'd rather see the elimination of the Bureau of Indian Affairs. This group should have been abolished long ago. Indians need to care for themselves. The BIA wastes money.
We live in a rural area, and pay more for electric service. Makes total sense, as the company has many fewer customers per mile of line it must maintain than in town. We'd rather pay less, of course, but consider it the "price of admission" for getting to live here --- and not having to live like the Amish.
The USPS is ripe for privatization. There is absolutely no reason that Congress cannot delegate its constitutional responsibility regarding postal delivery to the private sector.
After all, Congress routinely delegates its Article I, Section 8 powers to unelected bureaucrats whenever it insists on crafting packets of rhetorical puffery and vague political policy aspirations, declaring them to be legislation, and leaving the hard details Congress should address to unelected bureaucrats who have become our overlords because of this malfeasance.
By the way, we live in a rural location, 3 miles off the nearest paved road. The postman, FedEx, and UPS delivery folk know us very well. I suspect this vaunted concern that rural populations not be deprived of their quota of junk mail is merely a strawman erected in the hope that nobody sets it ablaze with a fact or two.
Robert VerBruggen - one correction: the USPS does not going begging to the Federal government for rate increases. The USPS is treated much like a public utility. It can raise rates as needed after presenting data to the Postal Regulatory Commission justifying the rate increases. (During the rate proceedings, interested parties can then put their 2 cents in.) Typically (but not always) the USPS gets most of what it asks for.
Even despite the drastic drop in mail volume, the unions are the main reason the USPS loses so much money. The people are ridiculously overpaid and the contracts basically reward lazy, lousy workers, a large percentage of whom seem to think they are entitled to collect a paycheck while doing as little as possible to earn it. As is typical of unions, it is virtually impossible to get rid of the worst offenders, let alone the average slacker. For the record, my wife works for the USPS (but chooses not to belong to the union as AZ is a right to work state) and vents this argument to me just about every day.
Speaking of inefficiency, I have two examples just today:
I moved my office on April 30th and filed a forwarding address. Today I recieved a letter from a client that they mailed on May 6th. I moved three blocks.
When I got back from my daily post office trip, I had an email from a client saying he had not yet received his tax return. I mailed it ot him on June 3rd.
Privatize the post office. Perhaps then it will have an incentive to consider customer concerns.
Consider the following true story.
An asthmatic customer receives mail from a carrier who insists on wearing far too much patchouli oil and finally, asks that carrier (very nicely) to please not get the patchouli oil on the delivered mail because it causes the recipient to experience an asthmatic reaction. When the postal worker ignores this very polite request, the mail recipient's concern is bumped up to the local office out of which the carrier works. The result? The carrier insists it is her RIGHT to wear the patchouli and persists in doing so - because the union protects her right to wear "fragrances" that cause her customers to have allergic reactions.
It is true the carrier do have rights but if it involve safety then it could be change. The carrier should have been asked to use something else that didn't offend or cause a safety factor. That decision is left up to the Post Master. Since it did not offend the customer but cause a safety factor the post master should have told the carrier to change because of this. As long as there is proof this can be done.
