The USPS announced today that it wants to close doors on Saturday to save an estimated $3.1 billion. Two weeks ago, the USPS announced another 2-cent raise in the cost of a stamp. Last week’s announcement that they lost $1.9 billion did not come as surprise, but instead as another grim reminder that government-run business is a losing proposition. Sam Pulcrano, vice president of sustainability at USPS, said they can get back on track to being profit neutral again if given the opportunity.
In 2006, Congress passed a bill that would audit the USPS and unveil some of the problems with the world’s largest letter carrier. What the Government Accountability Office found in 2009 was not a big shocker. “In the short term, several options could assist USPS through its difficulties, some of which would require congressional action,” detailed the report published by the GAO. “USPS has proposed that Congress give it immediate financial relief totaling about $25 billion over the next eight years by changing the funding of its retiree health benefits.”
Over a year ago the Feds knew the USPS needed to be bailed out but they did nothing to stop wasteful deficit spending. The USPS is almost at the $15 billion debt limit set by Congress and yet their answer is to cut services while raising fees. Unfortunately, government is the only organization that considers cutting services and raising fees as a viable solution. The USPS has operated as a ‘private business’ with government oversight since its creation.
The U.S. Senate is viewing the potential takeover of our private financial system as the mere beginning of sweeping reform of private industries. The Postal Service is a shining example of why government-run businesses are bad policy and bad for Americans, and it should come as no surprise that many Americans want the takeover bill defeated.
The real problem with the Post Office is that it is not run like a business. It has more locations than Walmart and McDonald’s combined and is thought to be more reliable than FedEx or UPS. It is recognized as a leader in mail throughout the world, but it loses more and more money every year. FedEx and UPS both have valuable stocks at over $50 a share. UPS reported a 37% growth in the first quarter of this year. Mail is not dead. The USPS has to reinvent the way it delivers its mail. USPS has partially crippled itself with employee and retiree benefits, however that does not mean it cannot be saved. Like every American I check my mailbox daily for the latest junk mail, advertisements, coupons and bills. Mail is a way of life. One less day of mail is not the end of the world but it is the beginning of the end to a way of life.
We can’t allow the USPS to be bailed out of the problem it has gotten into. Like any business model that fails, the free market must respond. The USPS has a brand identification that cannot be matched. Its product is becoming outdated but has years of shelf life remaining. The size of the USPS is incomparable to any other package delivery company in the US, both of which are making money. Instead of bailing out another organization mismanaged by the government, why not sell it? The American people will receive substantial profits from the sell and they will benefit from greater competition in the future.
A common misperception is that some services must be provided by the government to Americans, simply because no one else can profitably do so. As UPS and FedEx have demonstrated, mail can be profitable and even lucrative with the resources that USPS commands.
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