Tag: USPS

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Accountability free trade & free markets general freedom national politics & policies privacy subsidy too much government

The Post Office Scam

USPS, Post Office, monopoly, competition, Amazon, discounts

The President of the United States says that the U.S. Postal Service is scamming us by offering shipping discounts to Amazon, the mail-​order giant. “Post Office scam must stop.”

President Trump is hovering in the vicinity of the right idea. But what about government-​required discounts for shippers? Are these scams too?

Congress has long required lower postal rates “for religious, educational, charitable, political and other non-​profit organizations.…”  Robert Shapiro estimates that such mandates cost the agency over a billion dollars a year. The government forces USPS to do a great many things that lose money — things that companies functioning in a free market cannot profitably do. 

And American taxpayers must perennially fork over billions to sustain its lumbering operations. 

It is true that, in markets, buyers of large quantities of a good or service routinely pay less per unit than buyers of small quantities; such discounts can enhance the seller’s bottom line. The fact that USPS offers discounts to a mega-​shipper like Amazon does not in itself show that charging more per parcel would generate more revenue. 

The question is, then, which transactions would flourish if the agency were just another market player instead of a government-​protected, government-​hobbled, government-​subsidized bureaucracy?

Like any government-​run “business,” the Post Office is itself a “scam.” This scam must stop. Phase out USPS as a government agency and let any company deliver first-​class mail to our mailboxes on any honest terms that might attract customers.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets general freedom government transparency national politics & policies responsibility too much government

Post Dated

USPS, Postal Service, Post Office, Mail, bankrupt, government, inefficiency, Common Sense, Illustration

What does a business do whose market share is decreasing, is billions of dollars in debt, and which incurred one-​third of that debt just last year?

Realistically, it cannot be sustained. Not as a normal business.

Of course, the business in question has been struggling to reform, has been cutting costs. But can’t cut enough.

I’m referring to the United States Postal Service. Not a “normal business,” either: no “normal business” is authorized in the U.S. Constitution — or must suffer with the 535 members of Congress as its board of directors.

Kevin Kosar, writing at the Foundation for Economic Education, says the “existential crisis is already happening.”

And by this he doesn’t mean that the organization is going through a bout of anxiety leading to Nausea, or is so estranged from humanity that on a beach the company will kill an Arab — though that may be indeed true, “going postal” and all. He means, simply, what his title says: “USPS Is Going Down, and It’s Taking Billions with It.”

Many on the left say the problem is Congress’s insistence that the enterprise fund its employee retirement program. Kosar quotes an economist who figures that, even without current (and still inadequate) levels of pension contributions, the post office would have “lost $10 billion over the past seven years.”

Besides, those pensions must be paid for at some time — postponing them just delays the inevitable, making a future bust that much bigger, less manageable. (Current level of unfunded liability? $54 billion — which is not accounted for in its official debt.)

The Internet is more important than the post, now. Could it be time to junk mail?

This is Common Sense. I’m Paul Jacob.

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USPS, Postal Service, Post Office, Mail, bankrupt, government, inefficiency, Common Sense, Illustration

 

Categories
national politics & policies too much government U.S. Constitution

Authorized, But in the Red

According to the late economist James Buchanan, there exist three basic categories of government functions: protective, productive, and redistributive.

The protective functions are most basic. As inscribed in the Declaration of Independence, we are to be protected by government not in a scattershot way, but by having our rights delineated and defended. Think courts and the military.

The redistributive functions make up the bulk of the federal government, today … according to a recent Heritage Foundation chart, “More than 70 Percent of Federal Programs Goes to Dependence Programs.” Most of these, like Social Security and Medicare, were not originally contemplated as tasks for the federal union, and are flagrant violations of the Constitution.

But some “productive” (business-​like) functions were placed into the Constitution, the most famous being the authorization to create a postal service.

Though no longer an official wing of the U.S. Government, the Postal Service is still hamstrung by congressional micro-​management, as the shrinking mail biz busies itself trying to erase red ink.

The current notion is to drop Saturday delivery of all but packages. The enterprise hopes to save billions on this reform, alone, and was able to initiate the service cut without Congress’s approval by gambling on what some are calling a legal loophole.

Perhaps as politically dangerous is the ongoing attempt to get rid of post offices in smaller communities, replacing them with “Village Post Offices” that private enterprise would run.

It’s worth noting that though the Constitution allows for mail delivery and a few other “productive” services, these aren’t very productive — at least, they tend to operate in the red.  Besides, what is authorized by the Constitution doesn’t mean required by the Constitution.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies too much government U.S. Constitution

The Post Office’s Future?

At some point approaching catastrophe, one has to stop offering googly sounds of uplift and hope, and just speak the truth.

Postmaster General Patrick Donahoe may understand that. The U.S. Post Office, he recently told the National Press Club, is “in a deep financial crisis because we have a business model that is tied to the past.” Deep ties to the past, indeed. Setting up a postal system was written into the Constitution.

Early in the system’s history, postal positions served as rewards to friends of successful politicians. This put a lot of bad apples into the cider; the business soured. Postage skyrocketed.

This sorry situation brought entrepreneurs into the market, delivering letters at a fraction of the government system’s prices. The politicians fought back, took the competitors to court, and won — on dubious Constitutional grounds.

But they did overhaul the system, reducing prices.

That was a long time ago. Today’s situation may be worse. As Donahoe put it, “We are expected to operate like a business but we do not have the flexibility to do so. Our business model is fundamentally inflexible.”

No surprise, Congress is inflexible. But there are competing bills rumbling around to allegedly fix the financial woes of the institution Donahoe calls “a national treasure.”

Well, if it’s a treasure, sell it off: The federal government could use the money. (Though likely not well.)

And the people could use a good privatized mail service. Or two. Or more.

This is Common Sense. I’m Paul Jacob.

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folly free trade & free markets too much government

The Alternative to the Public Option

The congressional “progressive” caucus still wants to impose a public health insurance option, allegedly to “reduce the deficit.”

According to caucus kingpin Raul Grijalva, deficit hawks are “hypocrites” for predicting that government spending would balloon were a public option imposed. Their “excuse … that it was going to be too expensive is phony,” according to Congressman Grijalva.

The progressives’ notion seems to be that accelerating the pell-​mell government takeover of the medical delivery industry is the very best thing one could do to reduce the deficit.

If that’s the case, then why not also “reduce the deficit” with respect to other sectors of the economy in which government spends any money at all — that is, in any economic sector — by launching a government takeover that eventually swamps private markets altogether? 

By “progressive” logic, communizing the whole economy must be the best way to foster fiscal sobriety in DC. 

Absurd, I know.

Perhaps Grijalva’s deceived by his franking privilege. The public option for postal delivery works so well. For him. For the rest of us, we have to pay the billions the USPS loses every year.

The solution to the USPS’s constant, persistent failure is not to regulate and nationalize Fed-​Ex and UPS and every other alternative. 

Real progress requires the opposite of Grijalva’s “progressivism”: Pry government out of both health care and postal delivery. This is not a radical idea. It is only … well …

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Privatize the Post Office!

Weeks ago, in the debate over whether to euthanize what’s left of freedom in American medicine, President Obama made a stunning concession about the so-​called “public option” being proposed. Hoping to assure attendees of a townhall meeting that private insurers would not be threatened by the public option, he said, “if you think about it, UPS and FedEx are doing just fine, right? … It’s the post office that’s always having problems.”

Yes. The post office. The “public option” in mail delivery: chronically in financial trouble; chronically over budget; chronically being bailed out by taxpayers. 

So, don’t worry, everybody! Government expansion into our medical delivery system will be just as lumbering and inefficient as the post office is in our mail and package delivery system. 

Er, good point, Mr. President.

Some might argue that under the proposed public option, direct private competition will in fact be allowed, whereas direct competition with stamped-​envelope postal delivery is not allowed. But, as many supporters have conceded in unguarded moments, the Democrats’ reform is intended to be a transition to a single-​payer system. Moreover, the medical reform bills pending in Congress are bulging with new mandates and price controls for private insurers that will hamper their ability to compete — something UPS and FedEx don’t have to contend with.

The president has done us a favor. He’s reminded us why we should privatize postal delivery.

Health care too.

This is Common Sense. I’m Paul Jacob.