Should America Fully Privatize its Postal Service?

“UPS and FedEx are doing just fine. It’s the Post Office that’s always having problems.” ~President Obama, August 11, 2009.

As Congress and the White House intensely debate state-run health care, perhaps a more worthy question would be to ask if America should fully privatize it’s postal service.

The Post Office is posting million-dollar losses every month. But it isn’t bleeding. Rather, the USPS is hemorrhaging, barely hanging on by way of life support:

The only way the post office can stay in business is its government subsidy. The USPS lost $2.4 billion in the quarter ended in June and projects a net loss of $7 billion in fiscal 2009, outstanding debt of more than $10 billion and a cash shortfall of $1 billion. It was moved to intensive care — the Government Accountability Office’s list of “high risk” cases — last month and told to shape up.

The partial or complete privatization of the United States Postal Service would be significant in curtailing outlandish government spending, as well as highly streamline and improve the efficiency of mail delivery services. While mail delivery is less and less important with advances in technology and the advent of instantaneous communication, it is still a necessary service with a market that can produce profits, if utilized properly.

A question worth revisiting, with immediacy

The question of privatizing the postal service has been raised before. Numerous times. But if ever there was a time for Congress to act on behalf of all Americans’ interests, it would be to privatize the Postal Service in lieu of this historic, multi-trillion dollar budget deficit that threatens to irreversibly damage the financial well-being of our country. The answer to this problem is not a bailout. The answer is capitalism.

Origins: The Tragedy of the Commons

Article 1, Section 8 of the United States Constitution grants the Congress the power “to establish Post Offices and Post Roads.” As such, the privatization of the postal service would require a Constitutional Amendment, which may be met with some reluctance if only because of the sacred nature of the Constitution. But, what are the origins behind the government controlling and operating a mail-delivery service?

The Tragedy of the Commons” is the term used to describe “a dilemma in which multiple individuals acting independently in their own self-interest can ultimately destroy a shared limited resource even when it is clear that it is not in anyone’s long term interest for it to happen.”

In other words, the “Tragedy” is a specific class of social dilemma in which people’s short-term selfish interests are at odds with long-term group interests and the common good. Similarly, in the study of Public Policy, this dilemma applies to the necessity of a nation-wide mail delivery service, which in the 18th Century was absolutely vital to communication and the free flow of information, but far too daunting and expensive for ordinary citizens to establish themselves. Who would pay to provide  such an expensive service? Who would invest so heavily in roads, postal routes, post offices?

The dilemma is clear: Americans needed a national mail delivery system, but no one except for the government would be able and willing to provide such an expensive service. The Constitution went a step further in providing a mail delivery monopoly to the government. But wouldn’t such a measure be much less traumatic to the American tradition than socializing health care?

Able, but willing?

The United States government is completely able to privatize the USPS. In 1934, the government established phone company AT&T (the “Bell System”) as a regulated monopoly under the jurisdiction of the Federal Communications Commission in the Communications Act of 1934. By 1984, AT&T agreed to a federal ruling that broke the monopoly and resulted in AT&T splitting off twenty-two subsequent and separate Bell Operating Companies.

Similar options for the USPS might include auctioning off services, equipment and personnel, and breaking the government-run entity into various private, regional entities. The question remains whether the US government would be willing enough to see a similar split of the USPS through.

The Next Great American Debate, and Champions of Capitalism

Last week, I penned a piece on “the Next Great American Debate,” which asserts that the political debate between the issue of the economic socialization of the United States and the defense of American capitalism will only continue to rise. As vociferously as champions of capitalism are fighting the unpopular movement toward socialized medicine, they must equally demand the privatization of the United States Postal Service.

The United States government cannot efficiently run a relatively simple mail delivery entity (just imagine the quality of state-run health care). The answer for fixing the US Postal Service is private industry and capitalism. Capitalism is the most efficient economic system because it is incentive based and compliments humanity’s primarily self-interested nature.

Privatizing the US Postal Service should be a major issue for the Congress, as it will alleviate the massive budget deficit and help curtail mounting debt during this incredibly trying era. If Congress is to make any strides in the public’s eye, they will shelve their movement of socialization of health care and instead work to privatize the American postal service.

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