Is the End in Sight for the Postal Service?

The long, expansive reach of the Federal government can become an impediment to building a consumer-friendly polity. While we are all familiar with the problems of expansive red tape strangling regulation, or government dollars crowding out private investment, there are also entire government agencies or government-sponsored enterprises (GSEs) that, by their very existence, harm competition, stifle growth, and harm consumers.

This is the first in a series of posts on certain Federal agencies that simply need to go.

The United States Postal Service has existed, in one form or another, since the birth of the constitutional republic. Rethinking the very need for the Federal postal monopoly may seem a bit odd, if only because the service has become ingrained in our collective memory as one of those things that have always been there and always will be there. The fact of the matter is that there is no longer any pressing need for a postal monopoly. In fact, the monopoly has simply become so bloated and mismanaged, that either service cuts or a Federal bailout of the government-sponsored enterprise of the USPS will be on the table without a move to privatization.

The Internet revolution has dramatically decreased the need for the USPS. Most consumers and businesses conduct many communications through text messaging and email that would have necessitated a mailing just twenty years ago. (A contract, for instance, can now be turned into a PDF and emailed to a client, rather than snail mailed.) In 2011, 167 billion pieces of mail were sent, a drop-off of 22 percent from 2006. By 2020, the number may drop even further, to 118 billion.  Thanks to electronic filings, Tax Day came and went without all of the lines.  Consumer pay bills on line and may get their checks via ETF.  Consumers keep in touch with email and social websites like Facebook.

Meanwhile, the postal service’s heavily unionized work force, as well as generous mandatory pensions to USPS employees continue to bleed more and more tax dollars; without any marked improvement in services for mail recipients. In fact, the bloated budgets have only caused talk of scaling back services, such as killing Saturday mail delivery.

Does anyone really think that FedEx, UPS, or other private carriers would be entirely unable to step in and fill the void left if we eliminated the postal service and sold off its assets? Germany, in their quest to make a more efficient, leaner postal service actually sold off all but 24 of nearly 29,000 post office buildings.

At a minimum, the Congress should formally repeal the monopoly on first and third class mail and sell off more of its facilities to competitors, contract out certain services, and let market forces compete with the post office. After all, it’s not as if the Postal Service GSE is chronically bleeding billions of dollars or anything. (Oh. Wait.)

The next ten years are going to a very, well, pinched time for America. The government needs to do whatever it can to ensure that it runs a tight ship that maximizes consumer welfare. Relying on the ineffectiveness of a vastly unionized, bloated, red-ink spilling Federally-sponsored postal monopoly will simply harms consumers in the end.

Zack Morgan writes for the American Consumer Institute and is studying Law at George Mason University

 

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