Privatization Postal Services

[Todd-'o'-Vision]

Latest increase in stamp prices is proof that it's time to privatize the Post Office

WASHINGTON, DC -- Instead of raising the price of first-class stamps to 37 cents, the federal government should lower mailing costs by opening up the Postal Service to free-market competition, Libertarians say.

"It's time to stamp out the monopoly at the Postal Service, which costs consumers billions of dollars," said Steve Dasbach, Libertarian Party executive director. "The price of first-class mail will continue to move in one direction -- up -- as long as it's a crime to compete with this inefficient, government-created monopoly."

The price of a first-class stamp will rise to 37 cents from 34 cents in June, once the plan announced on Friday by the Postal Rate Commission goes into effect. The rate hike -- the third in 18 months -- will cost consumers about $5.6 billion, according to the Direct Marketing Association.

"The Postal Service claims it needs the rate hike to close an expected deficit of $1.7 billion, and to offset the loss of business to so-called competitors," said Dasbach. "But the truth is that the Postal Service doesn't have any competitors in the delivery of first-class mail -- and that's just the problem."

Federal law makes it illegal for FedEx, UPS, or any other private
company to provide first-class mail delivery. In addition, the quasi-
governmental agency is exempt from zoning laws, customs regulations, and vehicle taxes that hinder private package-delivery companies, such as FedEx and United Parcel Service.

"Imagine how much a Ford Explorer might cost if it were illegal for any other automaker to produce an SUV," said Dasbach. "Or imagine how often the price of milk or eggs would increase if only one grocery store was allowed to sell them. How often can a business that has no competitors raise its prices? As often as it wants -- which is exactly what the Postal Service does."

Monopolies have no incentive to run an efficient operation, noted
Dasbach, because they can't be undercut by competitors.

As a result, productivity growth at the Postal Service over the past 30 years is just 11.1%, compared with 53.4% for all private companies, according to the U.S. Department of Labor.

Even the Postal Service admits that it is woefully inefficient, said
Dasbach.

"For example, last year the agency announced that turning some air mail deliveries over to FedEx would save $1 billion in air transportation costs," he said. "That means FedEx can do the same job for less -- even after paying the costs of taxes and regulations from which the Postal Service is exempt."

And even former Post Office officials think it should be privatized,
said Dasbach.

"Former Postmaster General William J. Henderson said, 'I ran the Postal Service. It should be privatized.' " he said. "When even the Postal Service admits that its monopoly status is harmful to consumers, how can anyone else disagree?"

Another byproduct of the Postal Service's monopoly status: Greed.

Last year the agency paid $197 million in bonuses to executives, even though it ran a $199 million deficit. And it has forked over $900 million in bonuses over the past five years.

"Executives at private companies are rewarded when they succeed, but postal bureaucrats are rewarded when they fail," said Dasbach. "With this latest rate hike, the Postal Service will be rewarded for its failures -- again.

"The only solution is to inject this ailing, inefficient government
monopoly with a healthy dose of competition," he said. "If the Postal Service can prosper along with competition from FedEx, UPS, and other private firms, let it do so. But if it can't, it's time for the federal government to stop playing Postal Monopoly with the taxpayers' money."

Your thoughts or do you really care

 

[freescorfr]

I feel nostalgic for the days of my stamp collecting youth - the penny blacks and reds, the Royal mail.

Thank you Todd, for bringing back fond memmories.

 

[kotori]

It's still cheaper than the CDN$0.48 for your first class.

 

[SINthysist]

Are you kidding? I have to deal with three different companies for my phone billing.

Let me see, one stamp for local, one for long distance, a special stamp for Missourah delivery...

On the other hand, the postal service needs to be broken up before it finally convinces congress that email should be handled by the post office and will require a fee...

And of course, ol' SEE-We-Can-All-Get-Along George would sign it into law...

 

[Todd-'o'-Vision]

It's still cheaper than the CDN$0.48 for your first class.

where do you get stamps that cheap in canada?

 

[Dixon Carter Lee]

Your thoughts or do you really care

How about your thoughts? If I want to read the news I'll go to cnn.com.

 

[Mensa]

Not in my jurisdiction.

I don't care. I'm Canadian. Our postal service is even more screwed up.

The only comment I will make is if it is privatized, what happens to first-class mail delivery to remote locations. Getting it there often costs more than the Post Office makes on it. Will the private carrier continue to take a loss, raise remote people's rates, or refuse delivery and make them come and retrieve it?

 

[Todd-'o'-Vision]

Re: Re: Privatization Postal Services

How about your thoughts? If I want to read the news I'll go to cnn.com.

Actually my thoughts I disagree with privatation of the postal service but i do think that the system like many if not all government programs north and south of the border need a drastic overhaul

 

[Dixon Carter Lee]

Agreed. The Post Office is not something broken that needs to be fixed. When you really look at what the U.S. Post Office has to accomplish in a day, and how much they charge without making a profit, it really is amazing just how good a job they do. It could be better -- what couldn't?

 

[patient1]

There is a competitor: It's called e-mail.

My real concern is that any company in competition be required to provide nation-wide service by sub-contractor whenever nescessary, so that rural areas aren't isolated.

I wouldn't want to deliver a letter to Hawaii from here, not even for 37 cents.


I think the commercial competitors(in classic corporate raider style) have their eyes on the profitable metro areas, & intend to drop the unprofitable ones. That may be fine for them, but not for all of the businesses in this country that use mail for billing or advertising or other purposes.

 

[Skibum]

Privatising the Post Office would be counter productive. It is one of the few areas in which government has done a better job than private enterprise.

 

[Phoenyx]

It's still cheaper than the CDN$0.48 for your first class.

Not with the exchange rate.

Comes to Roughly 57 cents.