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Comment by jariel | Hacker News Reader

The author does not remotely address why, if USPS is so 'important' - that they cannot turn a profit, or break even.

How about we establish regulations, and then privatise USPS and encourage other vendors?

If states made minimal requirements for coverage (i.e. if you deliver in Chicago, you have to deliver everywhere in Illinois) and other types of regs, there no real reason that Verizon can be private but USPS cannot be.

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They turned a profit just fine until 2006 when a bill passed saying they had to fund 50 years of pensions and healthcare up front. https://en.m.wikipedia.org/wiki/Postal_Accountability_and_En...

The USPS has lost money over the last decade even if you discount the mandated pension fund payments. Pension costs haven't helped, but the USPS would be in the red anyways due to declining mail volume.

So, you're saying you don't think it's possible that the substantial sums of money that had been forcibly funneled away from them couldn't have been spent over the past 10 years to improve their operations and change the prognosis of your simple arithmetic?

What money? Like I said, the USPS has been losing money even before it makes the pension payments. To cover it's pension costs the USPS has been taking on debt from the treasury.

Debt has both monetary and opportunity costs. My point is that because of those costs and that I don't think that it's fair to say things would have turned out exactly the same minus the pension money, it's unfair to say they would still be red or by how much.

If they can’t fund the annual net increase in pension obligations they are incurring, then they either need to raise their rates or lower their pension benefits. Not actually funding the net annual increase in the Net Present Value of their Accrued Pension Benefits should not be an option.

> If they can’t fund the annual net increase in pension obligations they are incurring, then they either need to raise their rates or lower their pension benefits.

I believe this requires Congress. Hence why USPS is kneecapped. They’re legally obligated to fund them and also prohibited from taking the steps necessary to fully fund them.

they are restricted from lowing their rates per the same 2006 bill cited above. in addition, they have to pre-fund their pension benefits well into the future in ways that other privatized companies would never do. the obligation is overwhelmingly crippling. i don't remember the exact figures, but in 2006 USPS profited somewhere around ~$10M, and in 2009—three years after the law was enacted—they lost close to ~4B. i believe it was estimated that ~3/4 of those losses were directly associated with that law.

Why should the USPS be private or profitable? At best it should be operated as a break-even venture.

Reliable mail service to every address in the country is one of the foundational building blocks of a developed nation. Those that argue against it to me seem irrational.

No private business, especially when you compare it to a company like Verizon, will ever provide the level of universal service the USPS has historically. Rural areas have absolutely been "left behind" for Internet access just as soon as the regulators stopped regulating minimum access requirements.

No thanks. I don't want the (imo, completely and irreversibly broken) US telco landscape extended to the physical mail delivery. Not to mention the constitutional rights you get shipping with the USPS vs. any private business.

"Reliable mail service to every address in the country is one of the foundational building blocks of a developed nation. Those that argue against it to me seem irrational."

Those who would argue, blindly, that this service must be provided by the government ... seem irrational.

Moreover, we are in a digital era, trying to reduce our paper usage.

I have not received a paper letter of material usefulness literally in years.

95% of my mail is junk mail - wasted.

The remaining 5% is the occasional letter from the government, of the bank, reminding me of what I have already received online.

By any reasonable stretch, the USPS is largely just a 'junk mail service'.

Society may benefit frankly from the end of this waste and the end of paper mail for most procedures. What remains for the most part is just packages and a few letters there's no reason decent regulation couldn't have it managed by private entities.

Do roads turn a profit? They're pretty important.

What about the military?

In Florida we have a turnpike run by a state owned corporation. It's very profitable.

As for the military, it would be profitable if we could charge for services, ethically. However, I would argue that it pays dividends in a different ways and you know it.

Edit reply: the post office is less useful in 2020 than it ever has been in its existence. It used to be an absolutely critical piece of infrastructure as people relied on mail for bills, communication, magazine subscriptions, etc. Now over 90% of mail is junk advertisements. People consume digital media, pay bills electronically, communicate electronically, sign documents electronically, etc. There is less and less demand for the parcel business.

I'm not arguing that we should shut it down, but the prices should go up and the USPS should be able to set prices without an act of Congress and it should be able to vary postage based on distance traveled.

My argument about the Florida corp running the turnpike is that it's entirely possible to run a state owned enterprise in a profitable way. The Florida turnpike is one of the best maintained with the best amenities of any road I've ever traveled on, including excellent beautiful rest areas and Tesla superchargers at every stop. Congestion is quickly delt with rapid construction of new lanes. The surfaces are kept smooth and free of potholes.

> However, I would argue that it pays dividends in a different ways and you know it.

Kinda like roads and the post office huh?

Wow, a single turnpike? Time to privatize interstate travel.

Because both roads and the military are unsuitable for privatisation.

Roads represent a key problem with access, and of course, he military requires a level of commitment and responsibility far beyond what would be appropriate in the private market.

Mail delivery does not have such structural limitations as you can see literally from the existence of UPS and Fedex.

The question remains:

1) Why is USPS consistently bankrupt? 2) If we didn't have the USPS today, would the government create one?

> Mail delivery does not have such structural limitations as you can see literally from the existence of UPS and Fedex.

Incorrect. UPS and FedEx do not deliver everywhere. If it is not profitable for them to do so (e.g. in rural areas), they do not deliver and instead give the package to USPS. This is the public service part.

> Why is USPS consistently bankrupt?

Google “USPS pension obligations”.

> Why is USPS consistently bankrupt

Republican many years ago passed a law that forced the USPS to allocate budget for many many decades of pension payments in advance, something no one else is forced to do. It was a deliberate act of sabotage by Republicans in the Bush years.

Republicans and Democrats passed that law unanimously

When Jeff Bezos starts out competing the interstate with his private roads, then you can make that argument. The fact is that roads serve their market well, and if the USPS did the same they would not be being out competed by 10 different private entities at once.

I don't care if it's not their fault or that their hands are tied by regulations. The mere fact that they are in trouble is evidence that they aren't serving their purpose in their current form.

Please note that private highways actually exist:

https://en.wikipedia.org/wiki/Private_highways_in_the_United...

And they aren't out-competing publicly held roads.

This shows that the roads are serving their purpose adequately.

The postal service is a basic service provided to citizens by the government. It does not need to make a profit, and thinking about it in that sense is absurd. Does it make sense to talk about Medicare turning a profit? Does NASA, the military (heh), welfare, garbage disposal... etc... need to turn a profit too in your mind?

"Everything needs to make a profit" is straight out of right wing talking points. The purpose, of course, is to psyop all of us into privatizing everything, so a few cronies can extract wealth from everyday things Americans need.

> "Everything needs to make a profit"

I finally started watching Star Trek because I kept seeing “Ferengi” mentioned in this context. I’m only a few episodes into Next Generation but so far the analogy definitely holds up.

Interestingly, in one of the episodes the Ferengi leader prioritizes his own personal gain (in the form of revenge) over profit and his fellow Ferengi are so disgusted by the behavior that he’s overthrown.

I've gotten better service and respect for my privacy from USPS than any telecom monopoly like Verizon. If anything this feels like an argument in favor of municipal broadband. If the telecom industry is any indication, eliminating the USPS would just result in private mail carriers divvying up the country into a few regions run by monopolies, with lower quality service, and profiting at the expense of users. The point of a public good isn't to profit, but to serve a need that can't adequately be served by the private sector.

Fire Depts are important but don't turn a profit either.

Many services are difficult to quantify and/or cannot exist merely by charging only those who directly benefit from them.

Why does the importance of a public mail service depend on its ability to make money?

Here is a good explanation why there were profitable and now they are not (tldr regulations) https://youtu.be/IoL8g0W9gAQ

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