The U.S. Postal Service has raised its rates twice this year and is already talking about raising rates again next year. It has also made noises about eliminating Saturday mail deliveries. But the big problem with the Postal Service is not any of these particular policies. The big problem is that it is a monopoly and that the government keeps it a monopoly by law.
Why were people alarmed about the threatened elimination of Saturday mail deliveries? Would we panic if some supermarket said that it would close on Saturdays? No -- because we would just shop at some other supermarket. The Postal Service's problems are more serious because nobody else is allowed to deliver mail.
Nobody else is even allowed to put anything in your mailbox. Even though you bought the mailbox yourself, it is treated as if it is the property of the Postal Service. Moreover, the Postal Service can impose its own rules on possible rivals, such as Mailboxes, Etc. This is a monopoly plus.
The other side of the coin is that the Postal Service gets its monopoly and its various privileges -- including exemption from taxes, zoning laws, and vehicle license requirements -- at the cost of being subservient to Congress. By its own admission, the Postal Service has 26,000 post offices that are not making money. But closing them would bring on Congressional wrath. So would any attempt to seriously downsize its huge work force.
The net result is that the Postal Service is not only a rare privileged monopoly, it is an even rarer money-losing monopoly, due to such politically imposed inefficiencies. That is what is behind the constant rate increases and the threats to cut back service.
Although people who send first-class mail were exempted from the most recent rate increase, they are likely to be targets for the next one. But people who send first-class mail are not only already paying their own way, they are over-paying and subsidizing junk mail and other things that are not pulling their own weight economically.
People in a number of other countries have begun waking up to the fact that a government monopoly of mail deliveries is bad news for the public, both as people who send and receive mail and as people who pay the taxes to subsidize a losing operation.
New Zealand has allowed its postal service to close more than a third of its post offices and has started the process of privatization. Sweden, Finland, Australia and the Netherlands have also started the process of privatization.
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