The USPS lost $2.7B last year, even though it has a monopoly on mail. Why anyone would want to give it more responsibility is beyond me.
The loss comes from having to serve literally the entire country by law. A postal service in cities is profitable - a postal service that has to serve even the remotest ditch in the deepest desert of a flyover state with daily mail will always incur loss. And that is what society is for: to bear the cost of providing everyone in the country with affordable mail.
To add banking services to the unbanked (or those who do not trust the megabanks any more, given their historic lack of customer support and historically low image) is something that can very well be used to offset these losses.
https://www.21cpw.com/paea-the-most-insane-law-by-congress-e...
Providing basic banking services at a post office is not nearly as big a proposition as delivering mail to every address in the country.
Plus banking services are touched less frequently than mail. I get junk mail every day. I don't know the exact logistics of what they're suggesting, but I have a hard time seeing how it could be as expensive as mail delivery.
(I have a vague idea that this may be a politically loaded question, so I just want to put this disclaimer here to say that I genuinely don't mean for it to be. I don't know much about the past of the USPS and why it is the way it is, so i'm asking)
I think it's less a philosophical question -- is mail like roads or police? -- vs a matter of efficiency. It's obviously possible to NOT lose money delivering much more difficult things than paper. FedEx and UPS do it all the time. But they're private businesses who compete with each other (and Amazon and whoever else), so they have to figure it out or they won't be around.
The USPS, meanwhile, doesn't have to compete with anyone (in fact, it's illegal for anyone else to deliver mail) and has no incentive or need to be efficient because they can draw on the US Treasury whenever they need to. It's not that they're bad people, it's just the nature of the incentives and system involved (and also it's run by congress). These same dynamic would be there in banking though, which is why this seems like such a bad idea.
Do you make people hard to deliver to have to pay more, or do you "average" out the cost and make everyone pay roughly the same amount?
With a combination of taxes, flat-rate fees, and delivery-distance based costs, I think it's more than possible to make a system where it's not "free" or extremely cheap to send somewhere hard-to-get, but it's also not prohibitively expensive.
And IMO the postal service is riding that line in a way that i'm happy with. I appreciate that I can send a small box across the country for $5, and I can do that whether I live in NYC or in middle-of-nowhere pennsylvania. And I'm more than happy to pay a bit more in taxes to make up for the difference that the flat-rate doesn't cover if it means that lower-income individuals won't need to pay as much to send mail at all.
I know that there are problems with not having competition, but I think mail delivery is along the same lines as other "naturally monopolistic" things like power, water, sewer, etc...
Yes, "state sanctioned monopolies" can be a problem, and they have their downsides, but I believe for natural monopolies they are the best solution.
They also do not have the requirements to serve the entire country, and they do not have the bonkers pension requirements placed on them like the USPS does.
"The USPS, meanwhile, doesn't have to compete with anyone (in fact, it's illegal for anyone else to deliver mail) and has no incentive or need to be efficient because they can draw on the US Treasury whenever they need to. It's not that they're bad people, it's just the nature of the incentives and system involved (and also it's run by congress). These same dynamic would be there in banking though, which is why this seems like such a bad idea."
Money is far from being the sole motivator.
Because it's obviously a service of value, and profitability is what tells you that the net value created is positive. If you're spending more on delivering mail than people are willing to pay, you're squandering resources that could be better put to other uses.
> Why isn't mail (and possibly other services that the USPS could provide) treated like road maintenance or police or whatever else?
It should be; all of these are also services that have value, and should be held to the standard of profitability to ensure that the net value created is positive.
You've just guaranteed that no roads would ever be worked on in poor residential areas.
Why not? I said net value created. That doesn't mean each individual road has to show a profit. It means the enterprise as a whole has to show a profit. If improving roads to poor residential areas gives those people more options so they can create wealth and not be poor any more, that's a profit.
The USPS spent $2.7B more than it gained in revenue from sales of stamps etc. The idea that a government agency is supposed to be profitable, and the use of the business term "lost" is appropriate, is a politicized, partisan one. (The extent to which the USA's post isn't really a government agency any more is also extremely politicized and partisan.)
One way to tell that the profitability model isn't appropriate is, what would happen if the USPS did achieve profitability? The USPS's own press release attributes $1.1B of their "loss" to a refusal by regulators to let stamp prices remain at 49 cents, requiring them to go back to 47 cents. How is a "company" that already has extremely below-market prices and can't even get regulators to permit them to keep a 2-cent increase supposed to maintain profitability, should they ever achieve it?
Not complaining, but the fact I'm getting hammered by downvotes on all of these responses is mind boggling to me. I'm surprised how much of the tech world apparently thinks this is a good idea.
The USPS spent $2.7B more than it gained in revenue from taxes.
In analyzing USPS financials, bear in mind that they have to pre-fund all of their potential long-term pension and healthcare liabilities[0], unlike other arms of government.
ridiculous things like ePacket: https://www.forbes.com/sites/wadeshepard/2017/11/05/how-the-...
combined with lack of control over their business model and having to meet requirements that other businesses don't: https://blog.boomerangapp.com/2016/10/whats-killing-the-post...