The phrase “going postal” may soon lose its bang in favor of a whimper, if we are lucky.
The unsurprising news of this Labor Day weekend is the news that the U.S. Postal Service is close to defaulting and without a “bailout” the service will disappear.
In many ways, the impending demise of the postal service is emblematic of everything that has created the era of tea-parties but it is also a test that may determine our future.
The US Postal service is the nation’s most recognizable nationalized industry. The world of communication has changed considerably over the last 25 years, the postal service has not. For sure, it has modernized technologically in many ways, but it is positively antediluvian in one key way, it does not have to make a profit. It has for years been providing a service that other for-profit companies can do better and the only thing that keeps its doors open is our tax dollars.
The US Postal Service has a long and proud history and at one point it could be reasonably argued that such a service was key to our national security and that government involvement and subsidy was necessary. I don’t think anyone but die-hard unionists and socialists could make this claim today with a straight face. There are other companies out there that can and will provide such services at a reasonable price.
So what now? Do we let the US Postal service go-down (even if in a managed way) or do we repeat the foolish mantra of “too big to fail” once again? Do we cut the Postal Service off from the taxpayer spigot and force it to transform or die? Or do we repeat the mistakes of the past, the same mistakes we are repeating with Fannie and Freddie right now?
In the answer to this question perhaps we find the answer to a bigger question. Does America and our political class have the stomach for what needs to be done to save this country? Can we say good-bye to the old way of doing things and even do without? If we can’t do it with something as obvious as the Postal Service, we will never be able to it with the bigger and more painful problems.
We must let the Postal Service die if we are to have any hope of saving ourselves.
September 6, 2011 at 4:55 am
This comment has been removed by a blog administrator.
September 6, 2011 at 6:21 am
Let them sink or swim in the open marketplace, without the government subsidy. There's a balance out there between what the USPS provides, and what Fedex & UPS provides.
Let the free market determine the winners and losers.
September 6, 2011 at 6:26 am
The fiscal conservative in me says we shouldn't bail it out. We should free it from its constraints (i.e. the aforementioned union contracts and retiree investments) and let it survive or die on its own merits. However, I know that the loss of the postal service would be a huge loss to our country. There are many people who rely on the USPS for so many things.
September 6, 2011 at 6:53 am
Anonymous in the first post mentioned one of the primary problems that the USPS faces. The pre-funding of employee benefits. While there would still be problems that need to be addressed, without this the USPS would have been operating in the black for the past few years.
Also, the USPS does not run with tax dollars.
There is a lot that needs to be fixed. Many within know what needs to be done. We just need the flexibility to make it happen.
The Postal Service is a major network that directly impacts all avenues of the US economy. The products and services impacted by the USPS are estimated at over a trillion dollars. I'm not saying that it is too big to fail, just that there is no simple way to shutter an operation like this without major negative repercussions.
The Postmaster General has been saying for some time what needs to be done to get the USPS in order and back on track. Regardless of your ideas of what you'd like to see that USPS be down the road, the most important step is to get Washington moving on addressing the problem.
September 6, 2011 at 1:13 pm
Failure is the key to growth. Let it work.
And I agree with the first Anonymous commentor. The USPS does not cost the user less, but like most government entities, it does not use smart business practices. It is also overburdened with union restrictions.
September 6, 2011 at 1:13 pm
>There are other companies out there that can and will provide such services at a reasonable price.
That reasonable price will be far more than what you are paying now.
The Post Office will never be profitable, I know as Christians that's a horrific thought, everything MUST make money as Jesus commands but none the less it is of great service to many people.
September 6, 2011 at 1:22 pm
People who complain about USPS forget one very important thing: they deliver everywhere for the same price. I'd like to see exactly what a private company would charge to deliver mail daily to rural communities, when obviously the most money they can make is in the denseness of a city. It's bad enough to see what utility companies charge to extend lines out to farmer's houses.
September 6, 2011 at 1:52 pm
I do not want to see the USPS fail, but I do not believe they should receive a government bailout either. What we have here is a modern day example of how Union greed drives businesses into the ground. The Tea Party and Republicans should be loud and clear on this point! The USPS can survive, but only without the Union and every postal employee should have the right NOT to be in the Union.
September 6, 2011 at 2:07 pm
Patrick,
Currently the post office receives $0 of federal money. Its revenue consists entirely of postage and services.
Yes, the USPS loses money, and you advocate letting it fail and allowing the marketplace to determine pricing. Did you know though, that though the USPS receives no federal money and is charged with balancing its budget, that it is NOT ALLOWED TO CHARGE MARKET RATES for its services? That USPS is NOT ALLOWED to close post offices, reduce delivery dates, or enact other cost-saving or revenue-enchancing policy that might enable it to stay solvent?
What you are railing against is a straw man. The USPS is in a hellacious position. Its ability to raise revenue is limited by federal review board, its ability to cut costs by Congress (ie, close post-offices or reduce delivery), and yet it is ordered to be self-sustaining. That combination does not work.
Yes, the USPS self-inflicted some of these wounds (see: union contracts). However, if Congress and the Executive branch would take the shackles off of the USPS, it could survive and compete against Fed Ex and UPS.
September 6, 2011 at 2:59 pm
Unlike many other federal offices and programs, the U.S. Postal Service is constitutional. It is authorized by Article 1, Section 8.
"The Congress shall have Power
…
To establish Post Offices and post Roads"
September 6, 2011 at 5:48 pm
There are some things that the free market can't deal with in a "fair" way. The postal service MUST deliver to the "middle of nowhere." Private companies don't have to do that. Do we want to create a country where some of the most rural (and poor) areas are without postal service or it is so expensive to send a letter or package that they are effectively cut off? We as a nation made the decision to make telephone service available at affordable rates even if it cost a lot more to deliver service to some areas. I believe a government supervised and some-what subsidized Post Office has a role and purpose unless we truly want to become more of a nation of "have" and "have nots."
September 6, 2011 at 8:11 pm
Well … tempting as it may be to ax the USPS … it is part of our sacred Constitution … one of the enumerated Powers of Congress. Of all the government departments, it really actually is in there … so you're looking at a constitutional amendment to really kill it …
September 6, 2011 at 8:13 pm
Whether the USPS is a line item in the budget or not, it receives Federal dollars. If it did not, there would be no such discussion as we are now sharing — it would simply go the way of other failed corporations.
I have mixed feelings about the USPS. I can't help wondering to what extent its operations may be dependent on the junk mail many (most?) of us would like to banish. I am certain that I routinely receive more junk than real mail. And the junk receives a favored rate you and I cannot get. That's a fail.
September 7, 2011 at 3:19 am
@ Bill Meyer
The only real money received by the USPS is funding for special mail sorting/delivery in DC. This is payment for extra work required for security of mail to Legislature/etc. With revenues of 67 Billion in 2010 this payment, which is in the millions, is inconsequential. The only major government factor that aids in driving USPS revenue is the government created monopoly on the 1C letter delivery market. This is Federally protected. The USPS competes with private enterprise on all other fronts (with noted limitations and constraints described by previous posts).
September 7, 2011 at 3:54 am
Dear Anon 8:52 AM,
You wrote, "every postal employee should have the right NOT to be in the Union." This is the case.
September 8, 2011 at 6:44 pm
Why not privatize it completely? Consider the economic benefits of taking this monopoly and openning it up.
September 9, 2011 at 12:34 am
Option C, harness the power of the private sector while keeping it a quasi-gov't service. Contract out the monopoly.
Obviously, the ability to deliver letters in town is going to make money; I'm picturing an auction for the right to take that monopoly, with some restrictions like "must deliver everywhere for the same price on letters," "offices have minimum hours X, Y and Z," "letters must be delivered X days a week" and such.
Kinda like PBS– it should be able to make money, they just run it horribly.