Hacker News Reader

Comment by mikek | Hacker News Reader

Here's what I don't understand about the USPS situation. They deliver 200 billion pieces of mail per year. So if they're short 2 billion dollars, then they just need to raise the price of a stamp by 1 cent. Problem solved, no? Can somebody tell me why I'm wrong here? Would volume really fall that substantially if they raised the price of a stamp by a few cents?

View on HN

Much of the mail is bulk (aka junk) mail sent by companies and organizations that have lobbyists. These lobbyists make it very difficult to raise postal rates as you suggest.

Add this to the Mephistophelean bargains that they have made with their unions over the years (because they too are politically powerful) and you can start to see the predicament. They're being squeezed dry.

The abundance of bulk mail sent is a clear sign that the market could very easily sustain higher rates.

Demand is there and it's strong. Raise the prices.

what? are you claiming that the unions would have a problem with raising the price of stamps by a cent?

No, what he's saying is on the one side the junk mail senders are blocking rate increases with lobbying and on the other side unions are asking for high amounts of benefits and pay raises. This is what he meant by squeezed (from both sides) dry.

You're wrong because you have no idea what the relationship is between price and demand. Even though you might not care if the price is raised by x, it is obvious that for essentially every x, there are people who do care and will no longer pay it.

Reply on news.ycombinator.com