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Comment by cowsandmilk | Hacker News Reader

Why does it matter that Walmart offers it at a lower price? No one is forcing you to go to USPS. All that suggests is that USPS set the service at a price where it should be profitable.

Walmart may subsidize the service assuming you’ll spend money in store and they’ll get several more dollars out of the transaction. Even less expensive, grocery stores have long done cash checking for free when you check out at the store.

It is hard for me to be upset about a new service that is less expensive than the set of companies gouging people, but has some competitors that are cheaper. I don’t get up in arms over price differences between target and Walmart, why should I between USPS and Walmart?

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>Walmart may subsidize the service

What is the cost of this service anyway ? Why isn't it close to 0 ? The $5+ fee quoted in this article seems absurd when letter delivery is in cents and $5 will get your stuff delivered across the country with priority mail in under 2 days.

Check cashing is a potentially risky business. If someone cashes a $1k check that bounces or was fraudulent, that's 200 fees gone.

> All that suggests is that USPS set the service at a price where it should be profitable.

Why? Why does everything have to be about profit? Or even breaking even.

Can't the "profit" be the social good that the service provides?

Not everything needs to be about profit, but the USPS is self-funded. It doesn't use tax money for its operations so it does need to try to break even at least on the services it provides.

> No one is forcing you to go to USPS.

First, the government does force you to use USPS for some things. The USPS has a monopoly on the delivery of certain types of mail.

Second, we all pay for USPS as taxpayers regardless of whether we use its ancillary services. Well, we won't pay if check cashing is a profitable program, but we will if it's not -- and I'm skeptical that it will be profitable given you have fraud costs, training costs, etc.

> Walmart may subsidize the service assuming you’ll spend money in store and they’ll get several more dollars out of the transaction. Even less expensive, grocery stores have long done cash checking for free when you check out at the store.

To me these are both reasons for the government not to get into this business. If Walmart offers a lower price, whether that's a loss leader or not, it's great for consumers.

IMHO govt services make sense when private industry can't provide them effectively. That doesn't seem like the case here.

> It is hard for me to be upset about a new service that is less expensive than the set of companies gouging people, but has some competitors that are cheaper.

Zero qualms about other companies offering new services. If they work well, those companies will succeed, and if not, they will fail. And success is based on making customers happier than competitors do. That's not the case with government services. If they work well, great, and if not, everyone subsidizes them. For example if a startup launches check cashing and loses $10m because of fraud, they go under. If the USPS ends up losing $1b due to check fraud next year, I'm guessing they'll just ask for $1b more in funding the following year.

And if check cashing seems like a good direction, should the government develop its own reward credit cards? Buy now, pay later? Crypto exchanges? Etc.

> First, the government does force you to use USPS for some things.

The person you were replying to was referring to USPS's upcoming banking services, not their mail services.

> we all pay for USPS as taxpayers regardless of whether we use its ancillary services

We do not. USPS has its own books and does not receive taxpayer funds directly[1][2].

> To me these are both reasons for the government not to get into this business. If Walmart offers a lower price, whether that's a loss leader or not, it's great for consumers.

The problem is not that banking services are unavailable or that Walmart isn't offering them cheaply. It's that Walmart isn't guaranteed to continue to offer them cheaply, and it doesn't serve nearly as many rural places as post offices do.

There are post offices absolutely everywhere in the US. The same is not true of Walmarts.

> IMHO govt services make sense when private industry can't provide them effectively. That doesn't seem like the case here.

25% of Americans are underserved by banking as of a few years ago, so obviously something is wrong that the free market has not been able to solve[3]. Retail banking is not very profitable, so there isn't much incentive for existing banks to do a good job of it.

> I'm guessing they'll just ask for $1b more in funding the following year

Again, that's not how USPS works.

> And if check cashing seems like a good direction, should the government develop its own reward credit cards? Buy now, pay later? Crypto exchanges? Etc.

Ah, so we get to the "what about the slippery slope?!" part of the argument.

It's not black and white. We need to assess each case based on real data, not based on theory. No one is saying the government should compete in every industry just because it wants to cash checks for people who have been exploited by payday lenders.

We have nationalized libraries and schools, but somehow we haven't slipped down the slope to nationalized grocery stores. I think we'll be OK if USPS offers a very simple service that isn't far off from things they already do (like cashier's checks).

1. https://www.brookings.edu/blog/up-front/2020/08/26/how-is-th...

2. https://facts.usps.com/top-facts/

3. https://www.cnbc.com/2019/03/08/25percent-of-us-households-a...

I've heard that the post office doesn't receive taxpayer funds directly, but tbh even after googling around I don't understand how that works. For example https://www.brookings.edu/blog/up-front/2020/08/26/how-is-th... says the post office lost $70b between 2008 and 2018. If it lost that much money but is still around, who covered that $70b? (Honest question. I'd guess taxpayers are where the buck eventually stops?)

First, USPS is a viable business, even at current low (set by Congress) prices[1]. That's how it gets its funding[2]. If it has a loss during a certain year, it dips into its cash or sells assets, like any other business.

The reason it sometimes looks badly unprofitable is because of an attempt by Republicans to kill it by imposing unique and crushing financial obligations on it that don't apply to any other business[3][4].

By making it look unprofitable, they can argue that it's costing taxpayers money and then propose privatizing it[5]. It's part of a long-term strategize to run government organizations into the ground in order to justify dismantling them.

From Barron's:

> The USPS loses money, but cash flow has been more stable. That is because as mentioned above, the USPS has some unusual expenses, imposed by Congress, that artificially depress earnings.

> In 2006, Congress essentially told the post office to set aside $110 billion over 10 years. That, by our math, is $11 billion a year. The annual free cash flow reported by UPS, for comparison, was about $6.4 billion in 2018.

> The requirement hit cash flow until the post office could deal with the expense no longer. Now the Postal Service just records the cost on its books, cutting into the bottom line, but without setting aside any cash.[3]

1. https://news.nd.edu/news/postal-service-losing-money-because...

2. https://www.nbcnews.com/business/economy/usps-funding-crisis...

3. https://www.barrons.com/articles/usps-louis-dejoy-post-offic...

4. https://en.wikipedia.org/wiki/United_States_Postal_Service#R...

5. https://www.npr.org/2020/08/16/902977021/the-history-of-poli...

> IMHO govt services make sense when private industry can't provide them effectively. That doesn't seem like the case here.

Since your whole argument depends on this, I think you need more than a "seems".

Britain, which I'm most familiar with as I lived there before everything could be done electronically, and Europe in general, has/had several services like this available from post offices.

You could pay most bills by taking the bill and cash/cheque to the post office (called "giro"), or transferring from a bank account. A while ago, you could open a Post Office bank account there; nowadays you can make deposits and withdrawals to any UK current account. You could pay fees, taxes and fines, renew a driving license, apply for a passport, and probably 50 other things.

Oh, and send letters and parcels.

Together, all this means the staff have to know how to check someone's identity, and are used to handling cash.

50+ years ago, this was probably a great way to help the economy. Bills paid faster, government services available in every village.

The USA seems about 50 years late for that, so presumably the target is the poorest and/or most rural communities.

Britain is several steps ahead of the USA on privatising government services. Nowadays, many rural or small post offices are just a counter in a convenience shop or small supermarket, as seen here: https://www.cheshire-live.co.uk/news/local-news/little-sutto... (and the whole "Post Office" company is privatized, like in many European countries).

>IMHO govt services make sense when private industry can't provide them effectively. That doesn't seem like the case here.

If cash is legal tender, how is it that you can be paid in cheques that nobody would cash for free ? Isn't it the government's job to a) Either cash them for free, or b) Require employers to pay in cash if the employee asks for it ?

I find the fee for cashing a cheque, and most other fees in the US banking system, quite ridiculous.

I think that allowing companies to pay in cash is seen as dangerously close to paying "under the table" and not properly documenting for taxation purposes - governments like a money trail.

Not saying that's an unsolvable problem, but I can understand the reluctance.

As a recipient, I'd be afraid of the "I paid you last week! Don't you remember?" wage theft scenario, as well.

> First, the government does force you to use USPS for some things. The USPS has a monopoly on the delivery of certain types of mail.

What type of mail does the USPS deliver that you cannot pay FedEx, UPS, DHL, etc, to deliver?

They have a monopoly over letters and your mailbox. See: https://www.cato.org/tax-budget-bulletin/privatizing-us-post....

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