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Our Government (Not) at Work

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Small_USPS_TruckDoes any American really need to receive junk mail six days a week from the United States Postal Service? Probably not. Nonetheless, Congress imposes a rigid monopoly on us. As emails have increased and snail mail has deteriorated, the USPS has lost $50 billion since 1970. But as more bill paying, advertising, invitations, and other communications go online, there will be no deterrent to the flow of red ink going to the USPS, writes Chris Edwards, editor of the Cato Institute’s DownsizingGovernment.org.

USPS is losing billions of dollars a year even though it enjoys a range of government-conferred benefits. It has monopolies on first-class mail (letters under 13 ounces) and standard mail (bulk advertising items). It also has a monopoly on access to mailboxes, which is a unique protection among postal systems in the world.

Furthermore, the USPS borrows from the U.S. Treasury at subsidized interest rates, pays no federal or state taxes, is excluded from local zoning laws, and has the power of eminent domain. But even with these advantages, the USPS loses money because Congress prevents it from cutting costs. Congress blocks the company from closing unneeded post office locations, and it has blocked plans to end Saturday delivery.

The USPS’s costly union workforce is another problem. The company’s worker compensation is substantially higher than for comparable private-sector workers. Collective bargaining agreements—which cover more than four-fifths of the USPS workforce—make it more difficult for management to make cost-saving changes, such as increasing part-time work and introducing further automation.

Furthermore, unlike private companies,such as FedEx and UPS, the USPS dos not pay taxes, borrow at market rates, or follow all the normal business laws and regulations. Congress needs to free our postal system by privatizing the USPS and repealing its various legal monopolies. Chris quotes former U.S. Postmaster General William Henderson: “What the Postal Service needs now is nothing short of privatization.” Read more from Mr. Edwards here.

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Debbie Young

Debbie, editor-in-chief of Richardcyoung.com, has been associate editor of Dick Young’s investment strategy reports for over three decades. When not in Key West, Debbie spends her free time researching and writing in and about Paris and Burgundy, France, cooking on her AGA Cooker, and practicing yoga.

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