Privatize the Postal Service

W hat’s the difference between the public and private sectors? The answer is simple: In the private sector, if a business mismanages its operations, it goes belly-up. In the public sector, if an organization fails, it is kept on life support with more taxpayer money.

Such is the case with the U.S. Postal Service, which has lost over $100 billion since 2007. The number of pieces the USPS handles has fallen 57 percent since 2001, but the costly infrastructure needed to deliver every letter to every square inch of the country continues to hemorrhage money. This is why the Government Accountability Office added the USPS’s “unsustainable business model” to its “high risk” list, noting that the office needed to take action “to address its poor financial condition.”

Shortly after Donald Trump took office this year, he posited a truly wretched idea: moving the Post Office under his control at the U.S. Commerce Department. The only phrase in the English language more horrifying than “you should listen to my podcast” is “Donald Trump wants to take control of your finances” — the man couldn’t sell a fake bulletproof vest to Kristi Noem. With Trump at the helm of the USPS, it would eventually be cheaper to hop on a plane and deliver a letter yourself.

But Trump has also been tinkering with the much more appealing idea of privatizing the postal service. This is an idea whose time came decades ago, especially with the internet-fueled drop in physical mail over the past 20 years. We are just a few years from Grandma Venmo-ing your kids their one-dollar birthday gifts.

As the Cato Institute’s Chris Edwards has been arguing for years, the Postal Service doesn’t currently do anything that FedEx or UPS can’t also do — but the private businesses do it much more cheaply. In 2017, a U.S. Treasury analysis found that per-employee costs at the USPS averaged $85,800, higher than $76,200 at UPS and $53,900 at FedEx.

This is in large part because federal law grants the Postal Service a government monopoly under which only its carriers have access to mailboxes. Further, the USPS can borrow money at lower interest rates, is exempt from state and local taxes (sales, income, and property), and can impede competitors with its own regulatory power.

Defenders of the institution often point to the 2006 Postal Accountability and Enhancement Act, which required it to modernize its operations. But the real issue is structural: The USPS is trying to be both a public utility and a business, and in the grand tradition of compromise, it is failing at both.

Private carriers such as FedEx, UPS, and (in a different sense) Amazon have evolved into logistical symphonies, conducting billions of packages with elegant precision. The USPS, in contrast, often feels like your eccentric uncle who insists on using a rotary phone and thinks “cryptocurrency” is money being sent to dead people.

And then there is the infrastructure. The USPS fleet includes vehicles that predate the Spice Girls. Many sorting facilities appear to be held together by masking tape and the raw force of nostalgia.

The defense mounted by loyalists is always the same: Universal service! Every address! No matter how remote, how precariously perched atop a cliff in rural Idaho, how infrequently the subject of human consciousness! And yes, this is a noble idea. But nobility and practicality rarely share a bunk bed.

Privatization is often framed as a cruel dismantling of a beloved institution. In reality, it can be a lifeline. Germany did it. The U.K. did it. One 2019 report called the German system the “most admired postal operator in the world.”

Let us also acknowledge that Americans simply do not use the mail the way they used to. With physical mail becoming a relic, what you find in your mailbox is mostly junk mail, bills (the remaining few you don’t have set on autopay), catalogues, and Christmas cards from Aunt Alice. You probably get more packages delivered by companies that are trying to kill the USPS than by the USPS.

Yes, the Postal Service employs over 600,000 people. Yes, it has burdensome public unions. Yes, it gave us the wisdom of Cheers’ Cliff Clavin. But these are not reasons to forgo reform; they are reasons to approach it carefully and cleverly. Perhaps we should treat the USPS like an endangered species: protect its habitat but gently coax it into the 21st century.

Keeping the Postal Service as an arm of the government further invites conspiracy theories. In the early days of the Covid-19 pandemic, America reached a curious climax of collective paranoia when, as the November 2020 election neared, photos began circulating of USPS mailboxes being removed from street corners. This prompted an internet-wide frenzy, as Democrats thought President Donald Trump had ordered the mailbox removals to prevent people in primarily progressive states from being able to vote by mail. In Oregon, a Democratic congressman chained himself to a mailbox, declaring, “They’re not getting this one!”

Naturally, the truth was less cloak-and-dagger and more administrative. The USPS had simply decided to relocate underused boxes — an entirely mundane act of bureaucratic housekeeping. But nuance has never stood a chance on Twitter, where indignation travels faster than a cheetah on caffeine pills.

Privatization does not mean obliteration. It means innovation. It means allowing new ideas to enter the chat, preferably ones not written on parchment or powered by oxen. It means letting competition force improvements rather than asking a single, creaky institution to carry the national communications burden on its aging, stamp-laden shoulders.

Clinging to the USPS in its current form is not patriotism; it is Luddism. We must let go, privatize, and embrace a plan for solvency that doesn’t arrive two days late smelling vaguely of mildew.