The Postal Service is currently operating with a broken business model. Since the economic recession of 2008, we have been experiencing a significant imbalance between revenues and costs. This imbalance will only get worse in the coming decade unless laws that govern the Postal Service are changed. In the past few years, the Postal Service has recorded $21 billion in losses, including a default of $11.1 billion in payments to the United States Treasury. The Postal Service has exhausted its borrowing authority and continues to contend with dangerously low liquidity. We are losing $25 million a day, and we are on an unsustainable path.
And how! The United States Post Office can’t manage to turn a profit, and there are plenty of available substitutes ready and rarin’ to expand their own operations at zero cost to the American taxpayer. What is this business with preserving an inefficient, bureaucratic system that subsidizes costly mail deliveries and unproductive jobs? As John Stossel wrote this week, it is way past time to privatize this sucker.
They have a near monopoly on first-class mail delivery. You want to deliver something to someone? You better not put it in their mailbox — that’s illegal. The U.S. Postal Service doesn’t pay sales tax or property tax. They don’t even pay parking tickets.
With advantages like that, how do they lose money? …
“We are expected to operate like a business, but Congress has not allowed us the flexibility to operate like a business,” said Postal Service Board of Governors Chairman Mickey D. Barnett on my TV show. It’s all “part of being a quasi-governmental entity. That’s how the cookie crumbles.” Barnett added that the post office has “union contracts that have no layoff provisions.” …
And private alternatives are much better today. We have e-mail. UPS delivers 300 packages a minute and makes a profit. Federal Express, UPS and others thrive by finding new ways to cut costs. They don’t do it because they were born nicer people. They do it because of the pressure of competition. They make money — while the post office loses $16 billion.