Say Goodbye to the Postal Service

by Paul Panasiuk

The days of letter writing may soon be officially over as the United States Postal Service races toward bankruptcy.

The most trusted federal agency of 2010 is not only riddled with billions in debt, but has yet to find funding for $5.5 billion owed to a retiree pension and health benefit trust fund. By year-end, Congress will be forced to reform the Postal Service or watch it close thousands of locations and eliminate nearly 220,000 employees. Realistically, members of Congress will toss billions of dollars at the problem and postpone necessary reforms to avoid getting themselves booted out of office in the 2012 elections.

Simply put, the Postal Service is run like any other inefficient, bureaucratic monster muzzled with government labor regulations when it could be a prized beacon of modern commerce. The Postal Service financial debacle could easily be fixed were a 2006 law repealed that impractically requires the agency to fund 75 years of retiree health and pension benefits in only 10 years. While seemingly common sense, the unpromising future of the repeal is likely to force the Postal Service into default for the first time in history come Sept. 30 when the payments are due.

The best option to reform the Postal Service would be to allow investors to buy the company. Clearly, there is still demand for mail service as the Postal Service delivers 177 billion pieces of mail annually. But, because no private companies are allowed to offer better and faster service at lower prices due to the mandated monopoly for mailing letters, prices continue to rise.

In 1844, American political philosopher and abolitionist Lysander Spooner challenged this Postal Service monopoly with the American Letter Mail Company. It offered free local delivery and a cheaper mailing service that forced the Postal Service to lower its prices to compete. Of course, the federal government eventually sued the successful private company out of existence. Even in the mid-19th century the federal government idiotically found ways to intervene in the marketplace.

Some may say the free market would be unable to handle an operation the size of the Postal Service and distribute mail throughout the world for the same or lower costs. However, UPS and FedEx are both private package-mailing companies that have given efficiency a new meaning. Delivery standards now enable customers to send their packages overnight anywhere in the world and track them at every step along the way. Now although they handle a much smaller volume, there is no reason why their profitable system could not be applied on a much larger scale.

In a perfect world consumers would be able to choose their carrier to mail a letter. For now, we’ll just have to watch the Postal Service crash and burn. WIth luck, one day we’ll learn from the mistakes of a failed experiment in government controlling the marketplace.

11 Comments on “Say Goodbye to the Postal Service

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