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Yes, the USPS loses Billions of dollars a year. They are the example of every other government agency, the overhead is too much and they do not perform duties like other private companies do. The government should not be apart of mailings anyway, it is not in the constitution
It is quite unfair that, once again, government is limiting the American's right to choose.
the US postal service is slightly efficient, and necessary as seen through history. But, as always, allowing the private sector to have their own delivery service (for first class mail) will create competition, thus, creating more efficient means of service. Not to mention that prices might even get cheaper (more mail for less money, with express and shit).
Common misconception that raising rates hurts nobody, that is, except for direct mailers, small businesses, consumers, and anybody who doesn't work for the Post Office.
Justifications
1) "The USPS is hamstrung by government regulations. It's not fair to compare us with private business, because we have to do all sorts of things other companies don't."
How can you compare when they have never be allowed to compete?
2) "The delivery of mail is a natural monopoly."
Has the USPS ever heard of e-mail, faxes? Thanks to the genius of entrepreneurs in the private sector, those markets are now multibillion dollar industries.
3) "Universal service justifies our monopoly. Without it, there's no guarantee everyone would get mail."
USPS prides itself with universal service.
The high cost of rural delivery is fiction. It is all about the same cost.
Yes, I agree with you. I was going down the path that the govenment let the monopoly get as bad as it was. For instance, most businesses which have a true monopoly (or close to it) generally have poor products and/or services, but make money, not lose billions.
Despite the constitutionality of the Post Office, a Constitutional Amendment would be required to repeal the post office's power as the sole provider of first class mail.
It is another government failure at the expense of the American people. The coercive monopoly of the postal service totally ignores the value of the market. If UPS or FedEx or both were allowed to compete with the USPS, the USPS would ultimately fail without doubt. The USPS credits the failure to the increase in volume of internet use and e-mail. However, it is the inability of the USPS to adapt to market forces and demands.
The U.S. Postal Service must make drastic changes to avert a projected loss of $238 billion over the next decade. The move from six days to five could save the Postal Service $3.3 billion a year. The Postal Service is not funded by taxpayers and must rely on revenue from stamps and other postal services. It has borrowed about $10 billion from the U.S. Treasury and expects to borrow $3 billion more this year. [1]
If UPS or FedEx or both were allowed to compete with the USPS, the USPS would ultimately fail without doubt.
Yeah, and we can see this by the fact that Fed Ex and UPS currently often send their own packages through USPS to remote locations becuse it's cheaper than delivering them themselves.
If you privatize the USPS you will have some unintended consequences.
The reason for the monopoly is that private companies will not and do not find it cost efficient to deliver to all addresses. So, whenever there is any talk of privatizing the USPS, universal service will be eliminated by the market.
Do you want to allow UPS and Fed-ex to only deliver in highly populated areas driving any company with universal service out of business thus eventually bringing about large areas of no delivery? Would that not then bring about a more expensive goverment department to fill the needs of those individuals the private market finds too expensive to deliver to.It already happens as UPS and Fed-ex contract out delivers to the USPS in areas they don't find profitable to deliver to.
Or would allowing a monopoly for the sole purpose of not having to pay MORE goverment funds to deliver to places the private industries don't want to deliver?
The USPS gets the advantage it does to continue to deliver to ALL addresses.
Is it efficient, no way but in it's years it continues to deliver to every address on every business day. Now, I'm sure the USPS could compete with any business that is forced to do the same exact thing. If UPS and Fed-Ex were forced to service every address that receives something six days a week,you don't think their costs would sky-rocket.
If it's ever done you would hear the same people complaining because their service was stopped or become much too expensive.
Universal service is what keeps the USPS apart from all others.
What unintended consequences? ---Breaking Up a government monopoly.
Apparently, universal service justifies a government monopoly. Without it, there’s no guarantee everyone would get mail. That is a myth.
When USPS implies the phrase universal service, they mean the delivery of mail to any address anywhere in the US for one single price. Even if it makes no sense. Even if they have to threaten competitors with jail time.
How is it fair to make people who choose to live in cities subsidize people who choose to live in the country? So, those who live in country should get cheaper mail at the expense of urban people.
Who actually believes that delivering a package next door for the same price as to delivering to Alaska accomplishes some critical social goal?
Then, why is it so important for letters?
People live far in rural areas for a reason because well, they want to; they accept the costs and the benefits. More power to them. Universal service simply hides the true costs of rural living. Nothing more.
Am I saying it's right,I don't care.Is there some great social reason it should be done ,,,,NO.
I'm stating the facts as you were comparing goverment to private business.
Private businesses are far greater,far more efficient and the way to go but up until recently the delivery of mail was felt to be needed universally.Still today billions of dollars of business are conducted through the mail.The goverment and constitution saw the importance of that business at one time.Maybe not as important as today but several large companies are impacted by the USPS even losing one day of delivery.
I'm just stating facts that were not contained in the argument that would occur upon privatization.
I'm stating the facts as you were comparing government to private business.
Like I haven't seen that before. Those are government facts supplied by government bureacrats.
How about this: Let’s even things out by getting rid of the regulations you’re complaining about, in exchange for taking away your right to throw competitors in jail.
Whenever you propose that idea to monopolists complaining about regulation, it always meets with a stunned silence. It’s a deal regulated monopolies couldn’t possibly accept. Take away the privileged environment they’ve grown up with, and they won’t last two seconds.
All of the USPS advantages are strung up in regulations and laws, which makes it impossible for private companies to compete.
Why even things out your way??? You want UPS and Fed-Ex to compete equally, well let them compete under USPS regulations.
Would they work in a system with a goal of breaking even?
How long would UPS and Fed-Ex hang around if their goal was only to break even?
The USPS while given advantages is mandated to do things a private company never would do. They are mandated to do these things because the Constitution and our goverment calls for it. And here I thought only libs were for taking apart the Constitution.
Bring on the competition but mandate them and let's see how efficient the competition is.
Sure UPS and Fed-Ex constantly want to dip into the business of the USPS in hearings in front of Congress but never do they want to be mandated to serve the nation as the USPS does.
Do I agree with the monopoly, no way.I am pointing out that you are comparing the private sector to a goverment body that the Constitution and goverment says must operate in a certain business way. No goverment body will ever compete in this way with a private corporation.
What I am saying is no private co-corporation would take up the goal of that goverment body.
If the privatization contract was written to mandate universal delivery, no one can contest that, and I think you'll find that he winner of the contract will use all available means of complying with "universal delivery", even if means subcontracting back to USPS or anyone else. That's part of the beauty of private enterprise, there no rules prohibiting HOW "universal service" must be performed. Also, the USPS business model is outdated, like the contested closing of the Berkley, CA post office. Better to sell those beautiful bldgs for cash and move-into supermarkets, and other places where people naturally congregate in the course of their daily lives.
Finally, USPS's labor costs are way out-of-sight, when compared with UPS & FEDEX.
But the things is, guess who they often subcontract to deliver packages to remote locations FOR them? USPS. Because it isn't cost effective for them to do it themselves. The private secotr is NOT better at everything, some things the public sector just handles in a superior manner. This is one of them.
The public sector is not better than anything. Government is inefficient. If economists could figure out a way to privatize the military, it would be done.
The Post Office is more about inefficiency than effectiveness because given the right tools, the private sector can just be as effective and certainly more efficient.
Since the 1970's, the Postal Service was no longer supported by tax money; instead, the Service is required to rely on itself to generate revenue.
Even through $5 billion in cuts, the Postal Service will still fall $2 billion short of operating in the black in 2010. In order to make the cuts, the Postal Service has cut some 40,000 jobs.
The biggest concern with the Postal Service is the public monopoly, which does not allow for competitive forces to eliminate inefficiencies. The postal service is a textbook example of a monopoly because of a lack of competitive pressures. It faces little incentive to minimize costs and thus continues to operate at inefficient levels. Government laws prevent benefits of competition that challenges the postal system's monopoly.
Resources need to be reallocated more efficiently.
The public sector is not better than anything. Government is inefficient. If economists could figure out a way to privatize the military, it would be done.
Congratulations, you made an argument and proved it was wrong all in a single opening statement!
Guess WHY people "can't figure out" how to privatize the military and actually make it work?
And the post office doesn't operate in the black because it keeps prices very very low to give the US citizenry a cheap way to send mail because THAT'S IMPORTANT TO THE COUNTRY. Ever wonder why the founding fathers put it right in the Constitution? It wasn't just because they had some kind of personal fetish for postmen and thought it would be cool.
If you privatize the system costs WILL rise.
Let's say the population of the United states is 100,000 people.
Now, let's also say those 100,000 people all, on average, send 1 letter per year. So the USPS hires enough people to cover the ENTIRE country and get letters between all those people to all the places they live and pays their salaries with the postage they charge on 100,000 letters.
Now, let's privatize the system. We still have a population of 100,000, and they're still spread over the same geographic area, but now we have two competing companies that need to deliver mail. Let's say they compete really well and end up splitting the customer base evenly, so each ends up with 50,000 customers.
Now, instead of delivering 100,000 letters each they both end up delivering 50,000 a year. Which means they're only getting paid for 50,000 a year. But do they get to cut their work force in half? NO. Because the size of the workforce you need isn't primarily a function of how MANY letters are being sent, it's largely a function of how many PLACES they're being sent. And that didn't change! Oh, you'll be able to cut your staff a little, fewer people at the central sorting facilities and such, but not in half. Not even freaking close. So how do you pay them?
You RAISE PRICES. There's no other choice. And in the meantime the other company you're competing with is just doubling up on all your delivery resources so they can deliver to the same places you are where before a single delivery organization was handling everything. Which is wasting MASSIVE amounts of money.
1) "Ever wonder why the founding fathers put it right in the Constitution?...If you privatize the system costs WILL rise."
2) "in the meantime the other company you're competing with is just doubling up on all your delivery resources so they can deliver to the same places you are where before a single delivery organization was handling everything. Which is wasting MASSIVE amounts of money."
Responses:
1) The Articles of Confederation (which fed the concepts for the Constitution) stated "The United States in Congress assembled shall also have the sole and exclusive right and power of … establishing or regulating post offices from one State to another, throughout all the United States, and exacting such postage on the papers passing through the same as may be requisite to defray the expenses of the said office…". The Constitution says "Congress shall have the power...to establish post offices and post roads." Jefferson argued that the responsibility of establishing roads should be a State's responsibility and foresaw that a federal system would become a waste of money. Another thing to think about is the fact that the original postal system was from post office to post office, not house to house like it is now. It wasn't until 1863 that the post was delivered to homes as part of "Free City Delivery". Then, it wasn't until 1890 that "Rural Free Delivery" became an option.
2) I'd have to disagree with your premise. Even now, location and size determine the shipping cost of your UPS or FedEx packages. I don't think that would change. Some people would continue to pay lower costs for locations close to sorting centers. Some would pay more for locations furthest from sorting centers. Privatized companies operate on margins. Each industry has an acceptable margin of operation. If a company operates outside of those margins they tend to fail. Either they lose money because they are operating at too small of margins, or they lose money because they operate to far above the margin and competitors are operating within the margins. I would be more inclined to believe that if UPS and FedEx competed on standard mail, we would pay less for letters to certain recipients and more for others compared to current prices. I would also be more inclined to believe that either rural recipients would be required to travel to retrieve mail or the private companies would divide the destinations.
Bottom line, USPS is not only wasting postage fees, but also taxpayer's money. What is worse, requiring that a few voluntarily pay more for postage or mandate that everyone pay a little (via taxes)? USPS costs the average resident $235 per year to operate. I definitely don't get that much service out of it, so I am helping to pay for the rural recipients, which sounds too much like Socialism for my liking.
Bottom line, USPS is not only wasting postage fees...
What a fascinating claim. Let's see if you have any clue what it means shall we.
I just checked the rates on sending a 5lb package to New Jersey from my place.
Fedex is going to charge me $42 to get it there the day after tomorrow.
UPS is going to charge me $41.
USPS is going to charge me $15
Now, how about you tell me what part of that $15 they're wasting, how they're wasting it, and how privatizing the system and letting Fed-ex and UPS (those guys charging me three times more to deliver the same damn package to the same damn place) take everything over is going to eliminate that waste? Please, feel free to be detailed.
...but also taxpayer's money... ...USPS costs the average resident $235 per year to operate...
First, want to explain where you got that figure from?
Second, how much do you PERSONALLY use, say, the military in a given year? I'll just let you think through what my point is and see if you can get it, with one parting hint. We establish national services because they have benefits to the nation.
Why another meaningless insult trying to dumb others down by rising you up? WOW, pathetic!!
What don't you understand about what a public or coercive monopoly means?
It means that the government makes laws and regulations in favor of the USPS so that FEDEX or UPS can't compete, so they have to charge higher prices because of the unfair practices. Why can't you admit that USPS has a competitive advantage?
Why don't you ever respond to the actual substantive content of my posts?
If you feel like responding to my post, aswer the damn question in it. HOW is Fed-Ex or UPS going to improve on that freaking $15 charge for that package? With details. Don't just declare "they just will because private is better than public!" because that is not true for all circumstances.
Starting with, how are they going to establish a less expensive distribution network on a per customer basis when they're only able to rely on a fraction of the population for service fees to support it but the fixed costs of maintaining such a network are a huge percentage of their total operating costs? Tell me HOW. Stop just ranting on about "Oh, woe is us... monololy... wasteful government!!!" and make your argument.
Where are your details on why public is better than private? Instead of pseudo example dealing with the customer base with the meaningless math, which didn't prove anything. Every industry has to deal with customer base. Giving 100% to one company doesn't prove anything, except a monopoly.
In terms of fixed costs, what company or government agency are costs not a huge percentage of their operating costs contributed to salaries? 70-80% of operating costs are salary related. That is irrelevant. Variable Costs are the determining factor of the efficiency of a company or government agency.
That is not a "pseudo example". That is a description of reality.
Every industry has to deal with customer base. Giving 100% to one company doesn't prove anything, except a monopoly.
For cripes sake... yes, every industry has to deal with customer base. NOT every industry has such a massive percentage of their operating costs as fixed infrastructure requirements for providing their service that cannot be scaled to the number of customers they have.
In terms of fixed costs, what company or government agency are costs not a huge percentage of their operating costs contributed to salaries? 70-80% of operating costs are salary related.
Yes, salaries are a big factor in operating costs... but I said FIXED costs. In most other industries the number of people you need to be employing is far more directly correlated with the number of freaking customers you have instead of the amount of ground you have to cover. They're not a FIXED cost.
If you are, let's say, selling clothing and you lose half your customers you can probably lay off pretty close to half your people and close stores so your operating costs scale appropriately and you can stay afloat. It won't be fully half your people, but it'll be some reasonably scalable percentage.
If you are delivering mail across the nation and you lose half your cusomers... what? What do you do?
You can scale some, sure. Your sorting centers will need less people so you can lose a few people there. But you still need the sorting centers. You can't just go closing the things willy nilly because business fell off, they're not there because of how much mail goes through them, they're there because you need a local distribution point.
And you have to pay for it.
Only you just lost half your revenue. So can you still charge your remaining customers the same amount you were charging them before and still keep everything running? Can you? If so... explain HOW.
You obviously have no idea what fixed costs are. fixed costs are business expenses that are not dependent on the activities of the business. They are time-related, such as salaries or rents being paid per month or electricity bill.
You obviously have no idea what fixed costs are. Fixed costs are business expenses that are not dependent on the activities of the business
No kidding. REALLY? Like... oh... delivery system infrastructure that must be maintained regardless of how many people are currently using you to send their mail for example?
Like that?
What the hell do you think I was just talking about?
A government monopoly is a form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law.
If the single privatization contract (not multiple) was written to mandate universal delivery, no one would lose service, and I think you'll find that he winner of the contract will use all available means of complying with "universal delivery", even if means subcontracting back to someone else. That's part of the beauty of private enterprise, there no rules prohibiting HOW "universal service" must be performed. I believe that the USPS should be reformed into a Contracting and Oversight business, where their only function is to write ,award, and oversee/evaluate completion of that service.Also, the USPS business model is outdated, like the contested closing of the Berkley, CA post office. Better to sell those beautiful bldgs for cash and move-into supermarkets, and other places where people naturally congregate in the course of their daily lives.
Cost for private service will not go up, as rates of FedEx and UPS are both cheaper than USPS.
So, there are NOT two companies involved in officially delivering mail, unless someone finds another party cheaper than the winning bidder.
To the contrary, it was a statement about the potential efficacy of a privatized military since government military is inefficient. The only reason it is not privatized because of the financing situation. It is hard to quantify the correct amount to charge for defense.
Not only does the postal service public monopoly create inefficiencies, but it actually reinforces them. The postal system is pressured to preserve jobs, for example, and so it has an incentive not to take advantage of faster, more efficient technologies to transport mail.
Many believe that postal service experiences a profit loss from rural routes because carriers deliver smaller volumes of mail to a more dispersed population. However, the postal service reduces delivery costs for rural communities by delivering mail to a central pick-up location instead of providing door-to-door service. The result is that rural routes are no more costly than any other route. [1]
This type of regional mail and central pick up location would work just the same for private companies.
So, the number of places is as important as expected.
To the contrary, it was a statement about the potential efficacy of a privatized military since government military is inefficient. The only reason it is not privatized because of the financing situation. It is hard to quantify the correct amount to charge for defense.
Hey look, you did it again! You made an argument, then proved it wrong all by yourself in the very next sentence. You're getting good at that. It's almost like I don't even have to show up.
And "faster, more efficient technologies to transport mail"??? Beyond the automobiles and aircraft they already use you mean? Like what? Hyperspace travel? What the heck are you even talking about?
And if you think the only problem with the illustration I just laid out for you of what happens when you try to privatize mail delivery as clearly as I could manage was the existence of "rural routes" you're never going to understand this. It's the division of customer base while still having to replicate entire delivery systems redundantly to service the same areas a single system was capable of servicing before you started your brilliant "let's let competition magically make things better" project. There are some things competition does NOT make better. This is one of them.
You made an argument, then proved it wrong all by yourself in the very next sentence.
Your tactics of trying to dumb me down isn't going to make you any smarter. I didn't prove myself wrong.
You are just mad that I would like to see the military privatized. The sentence doesn't contradict. There already privatized military sectors in the United States such as Blackwater.
Where is your evidence that the real evidence of privatizing the postal service is the division of customer base while still having to replicate entire delivery systems redundantly to service the same areas a single system was capable of servicing instead of pulling it out of your ass.
So, if the Postal Service is so efficient and effective, why has the rates of gone up since the 1970's? Well, only when they need money. They raise the price of stamps. Since 1975, there has been 18 hikes in the price of a stamp. 1975-10 cents to 2009-44 cents. [1]
You have now twice declared that the only reason something you say would work better isn't being done is because you (or anyone else) can't figure out how to make it work better. What do you think you're accomplishing?
And your big argument that the postal service is inefficient is that it no longer costs 10 cents to send a letter like it did 35 years ago? It no longer costs $2 to go to the movies like it did 35 years ago either, does that mean the free market entertainment industry is also inefficient? Or does it maybe mean you either don't know how inflation works or are pretending you don't and hoping I somehow fail to notice?
By the way, I am quite aware of inflation. It is only created by your best friend, the government. How? Well, they print or ledger too much money into the economy.
Next, where is your evidence that
the real evidence of privatizing the postal service is the division of customer base while still having to replicate entire delivery systems redundantly to service the same areas a single system was capable of servicing.
I am still waiting on this response by the way.
How are the operational costs of a government postal service any different than a private postal service?
FYI, you are aware that the Postal Service does not receive any more taxpayer monetary support from the Treasury since 1971; instead, the Service is required to rely on itself to generate revenue.
There is no excuse to operate at a loss. So, it is run just like any other business except it has one huge and that is provided by Uncle Sam. The Federal Government has interpreted this clause as granting a de facto Congressional monopoly over the delivery of mail.
The biggest difference between the government and private postal service when the Postal Service is low on cash, well, to be fair, private companies do get bailouts, yet they continue to borrow money from the Fed upwards of $10 billion, but when the borrowing gets high, well, they just raise rates.
"the real evidence of privatizing the postal service is the division of customer base while still having to replicate entire delivery systems redundantly to service the same areas a single system was capable of servicing."
I am still waiting on this response by the way.
Waiting on evidence of what? That delivery companies need delivery systems to deliver things? What are you talking about?
And the excuse for operating at a loss is that the postal system ISN'T A BUSINESS. It's a SERVICE. The government is investing money in providing that service because it is worth it to the country to have it. Yes, it charges some user small fees to offset the cost so it doesn't have to be 100% tax supported, but it's not intended to turn a profit. That isn't the point. At BEST it should break even. It's intended to provide the large scale national infrastructure required to allow lots and lots of OTHER businesses to turn a profit because they all have access to this cheap system of mail delivery. If you run it like a business you're defeating the point of having a national postal service.
The division of customer base is not the sole reason to exclude private companies from entry into providing first class mail where a single entity is only capable of servicing. This is simply not true.
Why? There is no justification for the Postal Service to run at a loss because it is a business and not exclusively a service such as the military or law enforcement because the definition of a business is to provide goods and services to consumers in which by generating their own revenue, and the Postal Service does it already by delivering mail. It is a independent agency or business that is state owned.
The fees are a means of making a profit since they receive no tax money support as noted before; otherwise, if they didn't need to turn a profit, then it would be fair that they were subsidized by the taxpayers.
Lastly, the only reason why the system is cheap for a government postal service is because of all the rules and regulations that restricts private companies and enables the Postal Service. It is already a business, and it is a public monopoly.
I didn't say it was the only reason, stop setting up strawmen. It's just a BIG reason. It is impossible to set up a competitive system of private sector mail delivery that could match the performance and pricing of a single national public service. That's just a fact. They'd have to maintain similarly scaled delivery system infrastructures but they'd have to support it with only the revenues available from whatever fraction of the market they managed to secure as their customer base. That would absolutely require large scale price increases or they'd be bankrupted instantly.
And you just deciding to call the postal service a business doesn't make it one. If they WERE a business there would be some rather obvious differences.
First of all, you already know it enjoys a constitutionally mandated monopoly. Does ANY business that enjoys a constitutionally mandated monopoly on a highly useful service have any issues turning a profit if they want to? If the point of the postal service was to make money... which is what the point of a business is, then they would just double postage and people could pay it or not be able to send mail... just like that. They'd erase their operating losses overnight.
They don't do that, because THAT'S NOT WHY THEY EXIST. They're not a business, they're a constitutionally mandated service. They don't exist to turn a profit, they exist to provide the nation with national mail delivery infrastructure.
And yeah, the rules and regulations restricting competition with the postage service are indeed why it's so cheap. That's the POINT of the regulations. To allow the postal service to maintain its operations for minimal cost.
A competitive system integrated with the private sector could match the wasteful and inefficient system of pricing and services of a government postal service.
As of right now, I can't prove that because it's never been allowed. Public monopolies are economic fiction that defends 19th and 18th Century monopolistic privileges and has no useful place in the 21st-century American economy.
"The threat of privatization to universal mail service is a phony issue. In fact, as United Parcel Service and Federal Express demonstrate daily, universal delivery service is an objective to strive for, not retreat from. Not surprisingly, UPS and FedEx are now prepared to deliver to more homes and businesses than is the USPS." [1]
Just because you decided to call the postal service exclusively a service doesn't mean it is not a business.
As noted before, the Postal Service is a chartered, fully operated and owned corporation by the Federal Government. What don't you understand about chartered and fully operated? This is the definition of what a business is. The Postal Service is more businesslike than ever before.
Examples: Amtrak, PBS, FDIC, Americorps, FCIC and Tennessee Valley Authority.
Sure, I recognize the constitutional mandated monopoly, however, it can be repealed by a constitutional amendment.
Rules and regulations are only to prevent competition by hindering your competitors, so if the private sector was allowed entry, the government is terrified that they would undercut and outperform the USPS and render them useless. The Postal Service is not to maintain low operations for minimal cost, it is to maintain maximized cost; that is what a monopoly is regardless what type it is.
A competitive system integrated with the private sector could match the wasteful and inefficient system of pricing and services of a government postal service.
As of right now, I can't prove that because it's never been allowed.
How convenient. You're able to make claims about things that have never been allowed but you don;t have to back them up because they've never been allowed.
Bullcrap.
Make your argument. HOW does the private sector competitive system match the public one? If you can't explain HOW, you don't get to say it WILL.
Start with telling me how two different competing businesses, who need to charge enough to cover their expenses AND turn a reasonable profit on top of it, and need to establish delivery infrastructures sufficient to cover the entire nation the way the postal service does now, do that while only having some fraction of the national population as their own customer base without charging that fraction more money for postage than the postal service charges their customers now.
This is basic math.
Costs = C
Income/customer = I
Total revenue = I x # of customers.
For the sake of simplicity we'll say the entire mail-delivering nation of customers = 1,000,000 people.
Postal service needs 1,000,000 x I = C to break even. They're currently not even doing that with the rates they charge.
Let's say there are only 2 private companies that take over and compete for this business when we privatize, and we ABOLISH the postal service so they don't even have to compete with them too, just each other. And they're really well matched competitors scrapping it out and holding about half the customer base each. Then each private company needs
500,000 x I = C to break even.
Now, either make an argument for how the private companies costs to establish a national postal delivery infrastructure could be made less than HALF the postal service, or you have to adjust the other variable. Increased prices.
If you can't do that, you have no argument. You don't get to declare you're immune from having to support your position because it hasn't been tried. If you can't make an argument supporting a claim you don't make the claim in the first place.
As noted before, the Postal Service is a chartered, fully operated and owned corporation by the Federal Government
No, as you claimed before.
The Supreme Court (UNITED STATES POSTAL SERVICE v. FLAMINGO INDUSTRIES) the Constitution, and the federal statutes of the United States on the other hand have a different opinion. The postal service is explicitly not a government owned corporation. It is an independent establishment of the United States Government.
From the Supreme Court case in question:
"However, the other considerations the Court has discussed lead to the conclusion that, absent an express congressional statement that the Postal Service can be sued for antitrust violations despite its status as an independent establishment of the Government, the PRA does not subject the Postal Service to antitrust liability. This conclusion is consistent with the nationwide, public responsibilities of the Postal Service, which has different goals from private corporations, the most important being that it does not seek profits, §3621. It also has broader obligations, including the provision of universal mail delivery and free mail delivery to certain classes of persons, §§3201-3405, and, most recently, increased public responsibilities related to national security. Finally, the Postal Service has many powers more characteristic of Government than of private enterprise, including its state-conferred monopoly on mail delivery, §601 et seq., and the powers of eminent domain and to conclude international postal agreements, §§401, 407. "
I am glad that you are good at basic math. Congrats!
Despite the definition of the USPS, it still is a self generating revenue stream, and operational costs are pretty universal regardless whether a private corporation or government corporation.
Operational costs are such
TC=TFC+TVC------ Total Cost=Total Fixed Cost + Total Variable Costs
So, in order to understand the average cost per person that is the Average Total Cost, which is ATC=TC/Q
I understand your argument of profit making concerning operational costs, yet there could be rules and regulations restricting price increases of the private companies by price ceilings in order to deter from unfair price increases. This practice is already demonstrated in other industries. Rent Control, Gas and Food.
Considering whether the USPS is a business, the Supreme Court has no jurisdiction in making law; in fact, they never have. They only interpret law as it was written by Congress or federal regulators when brought to suit. They set precedent for future cases.
In the USPS v. Flamingo Industries appeals case, the question was whether the Postal Service can be sued under federal antitrust laws and not whether it is a business. Therefore, although I recognize the court as the highest court in the land, the Ninth Circuit Appeals reversed the antitrust immunity count where it ruled that 1970 Postal Reorganization Act waived the Postal Service's sovereign immunity and that it could be sued under federal antitrust laws as a "person."
As noted, the Supreme Court overturned this ruling.
Furthermore, the Sherman Act defines a person to include private corporations while Congress defined the Postal Service as a federal corporation or independent establishment so can’t be defined as a private corporation only because of Congress.
Therefore, unless Congress gives a congressional statement, which they never will, the USPS can’t be sued under the antitrust laws in accordance under the current definition of what a person is. Thus, under this current definition, the Postal Service has different goals from a private corporation since Congress defined the USPS as not a person, and thus doesn’t pursue profits as would a private corporate, but still must pursue revenue in order to operate. So, by default, then yes, it is not Private Corporation but a still a government corporation. Since the USPS is not applicable to antitrust laws, it has limited powers as those private businesses such has unilaterally setting prices or closing post offices, which often creates inefficiencies.
So, if anything, this appeals case only solidifies the public monopoly of the USPS by not only Congress declaring neither the USPS nor the government as a person, but the Supreme Court concurring with Congress’ definition of what a person is. So, since the USPS is not a person, then yes, it is not a private corporation seeking only profits, yet only because Congress established it as such, but a government corporation nonetheless due to what the Court declared as public responsibilities.
The USPS is not corporation in the private sense, but as noted before, it is a corporation owned by the federal government.
Yes, you could set price ceilings. However that is missing the point completely. If you want the private sector to run the show you have to set the price ceiling HIGHER than the point at which they break even with their operating costs, or else no private sector company is going to get into the business in the first place. And that point is WAY HIGHER than where the USPS is operating now.
Privatizing the postal service = much higher prices.
And while your lecture on the fiunction of the Supreme Court is fascinating, it's also irrelevent since I never claimed the Supreme Court made any laws. What it did is handed down a ruling on the law that already existed. And that ruling made it clear that the postal service is neither legally defined as a business, nor operates ike a business. And you have yet to dispute any of those facts. All you keep doing is saying over and over again that they charge money to people who use their services to cover their expenses when providing that service. Good for you. Doesn't make them a business. Businesses exist to MAKE PROFIT. The postal service does not. It exists to PROVIDE A SERVICE TO THE NATION.
Private Postal Service doesn't mean higher prices.
As noted before, the Postal Service is a chartered, fully operated and owned corporation by the Federal Government.
What does this sentence say? Does it mention business everywhere in the sentence? No, USPS is a federal corporation, and since the Congress defined the government as not a person as private corporations are; yes, it is impossible for the USPS to be a business. It is a federal corporation. Thus, the government is enforcing the public monopoly since the USPS is doesn't apply to antitrust laws.
Lastly, how can I dispute what the Supreme Court rule on? or what Congress decided. I have no control over them.
So, if the Postal Service doesn't charge money to cover their expenses, how do they generate operating costs since they are a service?
The public sector is not better than anything. Government is inefficient.
I can't help but feel that this is more of an ideological statement than a statement of fact. Through coercion or otherwise, the reason why we aren't talking about privatizing the postal service is because most people are genuinely happy with it. It works. I'd much rather use the United States Postal Service than UPS or FedEx. If you want to use either of those services you are free to do so.
All privet business is subject to regulation, if you want to repeal all government regulations that would be a different matter entirely. Your idea of a Laissez-faire economy has been tried before, it's the type of economy that the United States had just prior to the Great Depression. Needless to say, it didn't work.
And you are sadly mistaken if you think capitalism always precludes regulation. There is a difference between capitalism and Laissez-faire capitalism. It would help your arguments if you understood this difference.
First, the Great Depression was originally started as a recession, but significant mishaps in monetary policy destabilized the economy, particularly by the Federal Reserve along with irresponsible fiscal policy by Congress. These policies in turn shrank the money supply tagged with high taxes, which then greatly exacerbated the economic situation, causing a recession to descend into the Great Depression.
Second, WWII didn't get America out of the Depression. The Depression was prolonged by large scale government spending.
The misconception of prosperity during and after the war is common relating to unemployment rates, which is not surprising considering 16 million men and women were removed during the course of the war and are not considered as labor force.
Furthermore, when an economy shifts vast amounts of production to planes, ships, guns, and etc, and treated as prosperity, then producing planes, ships and guns are indeed good economic policy even if dumped into the ocean.
Not to mention, consumer goods were rationed and standard of living was low.
If WWII was indeed the factor, then why didn’t the end of the war plunge the country back into depression, or at least another recession?
Rather, 10 million men rejoined the work force and large government spending ended after FDR's death and the end of the war.
Lastly, in 1946, economic output returned to pre-1929 levels after limited government spending.
"War prosperity is like the prosperity that an earthquake or a plague brings.” ---Ludwig von Mises
All depressions start out as recessions. A depression by definition is a prolonged recession. You are attributing the great depression to "mishaps in monetary policy" which is kind of vague.
What caused the Great depression was out of control banking, which ultimately caused the Stock Market to crash. Banks where giving out more money than they could give back at anyone time, this is because at this time there was no federal regulation that mandated banks had to keep a certain amount in their coffers. When people discovered that the banks might not be able to pay them back, people panicked and there was a massive withdraw, everybody pulled their money out at once which caused a collapse of the banking infrastructure. And ultimately a collapse of the stock market. This problem was made worse by the great dust-bowl. The government refused to interfere with the free market as part of the Laissez fair principals of the time, believing that eventually the problem would fix itself due to the "Invisible hand".
The reason why most historians attribute WWII as the end of the great depression, is because this caused a sharp increase in demand by the government for a number of war-related services. And the reason the US wasn't plunged back into a recession after the war is because of two factors.
1) Soldiers had earned pay, which they could then spend on their return home.
2) Military production did not stop after the war, as tensions with the soviets was starting to rise.
If the privatization contract was written to mandate universal delivery, no one would lose service, and I think you'll find that he winner of the contract will use all available means of complying with "universal delivery", even if means subcontracting back to someone else. That's part of the beauty of private enterprise, there no rules prohibiting HOW "universal service" must be performed. I believe that the USPS should be reformed into a Contracting and Oversight business, where their only function is to write ,award, and oversee/evaluate completion of that service.Also, the USPS business model is outdated, like the contested closing of the Berkley, CA post office. Better to sell those beautiful bldgs for cash and move-into supermarkets, and other places where people naturally congregate in the course of their daily lives.
Finally, USPS's labor costs are way out-of-sight, when compared with UPS & FEDEX.
This is more about efficiency than effective because of the coercive monopoly. UPS and FedEx would hire more people where they would be able to cover the vast plains of the United States. The private companies would have more opportunity if the ban on private companies would be repealed.
Wow, there you go again. First we can cut health care costs by hiring lots and lots of doctors and nurses and building lots more hospitals... which have to be, you know, paid for. Now we can cut postal rates by hiring lots and lots more delivery people! Who have to be, you know, paid.
In your view it seems that any cost can be reduced by spending more money... it's fascinating really.
You should talk. The government is forcing people to buy insurance to reduce insurance costs. Seems to me the same logic.
Which is a sad commentary on your ability to apply logic.
It's the same as the difference between getting a larger customer base, and hiring a larger sales staff. Doing these two things has VERY different results on your costs.
Since I can't apply logic by your standards, what is the difference between larger customer base and larger sales staff. More mail=More staff, More money for Medicaid=More Staff.
17,000 more IRS agents will be needed for the new health care insurance costing additional 10 billion.
Supporting Evidence:
MORE IRS
(www.nationalledger.com)
Customers represent profit. Staff are EXPENSES. Sometimes necessary expenses to bring in that profit... but still EXPENSES. If you can't get that far you have no business discussing any kind of economic principles.
Assuming that you know the meaning and the determinants of price elasticity, how does the postal service pertain to the previous statement or were you referring to the health care statement?
No they wouldn't. Private companies generally hire less people to perform the same tasks as their public counterparts. A good example is walmart which is notorious for understaffing their businesses. The reason is simple, the less employees the greater the profits.
Wrong? There is no public counterpart to compare it to, how can it wrong? Do you even fact check things before you say them?
First of all, a one-time subjective experience at a single store doesn't tell us anything especially when we have statistical data to the contrary. Second of all, the number of 'associates' at BEST BUY that greet you at the door says absolutely nothing about how many people the average private business hires in comparison to a similar one run publicly.
Correct!! What don't liberals understand about the term 'public monopoly'? A government agency is the sole provider of a particular good or service and competition is prohibited by law.
They're liberals - they must have some problem or other. Joe and I agree that they should be locked up in a sanitarium - for their safety and for others.
Obviously the smaller company would need to charge more than the major company. My uncle owns a delivery company - he charges nearly double what UPS charges. If he got bigger than UPS, he'd charge less. But they, along with Canada Post and a few others, are so large that there is virtually no more room for him to expand.
What if your Uncle was by law, forced to service EVERY address in his town? Would his costs go up or down? Your Uncle cannot by law, charge more for a longer delivery than one next door. Your uncle also must deliver his delivery to the new address if someone moves( no matter how far away) for no additional cost for 18 months. Now how would those regulations affect the cost for your Uncle.
Now, could your Uncle compete against a company that cherry picked his biggest deliveries by giving them a discount but the competitor decided they didn't want to deliver to the 30,000 smaller customers and your uncle was forced by law to deliver to those non-profitable customers? How long do you think he would stay in business? How long would the 30,000 non-profitable deliveries continue to be serviced?
Not very long for the same price I would guess. Universal service is what drives the regulations of the USPS.
And I'm not liberal and agree with terminator on the things I've read he posted.... just have some ties to the USPS.
We can choose not to but the results will be higher prices and loss of service to some .
Again, if privatized you would complain about the prices or loss of service.
If privatization is what you want then you must accept this and tell a large percentage of the country that they will not receive anywhere near the delivery they now do.
Just pointing out the concesquences that you did not bring up.
There are two choices,privatize and see higher prices and loss of service to half the country(area wise) or keep it the same.
UPS and FED-EX will not provide universal service at the prices they do now, it is impossible.
So comparing them to the USPS is a little off in my opinion.
UPS and FED-EX will not provide universal service at the prices they do now, it is impossible.
Are you that dense? Of course not, they can't provide the prices as does the USPS BECAUSE OF LAWS AND REGULATIONS prevent them.
It is impossible.
Now, under the socialized postal service, it is cheap because those who live in urban areas have to pay a little more for those in rural areas; otherwise, it would be exactly the same if otherwise privatized. More mail is sent in cities than rural areas; thus, more expensive for urban and less expensive for rural. That is why it is universal service.
If privatization is what you want then you must accept this and tell a large percentage of the country that they will not receive anywhere near the delivery they now do.
They would pay for what he costs if not subsidized by the urban areas.
" Of course not, they can't provide the prices as does the USPS BECAUSE OF LAWS AND REGULATIONS prevent them."
Are you that dense???, the only business that cannot change their prices without approval from Congress is the USPS.
If UPS and Fed-Ex were immediately allowed to carry letters as you proposed and compete with the USPS, they WOULDN"T have that restriction. THEY can and do change their prices with the market possibly in a matter of days. It takes the USPS months to get a penny increase in a stamp. Are you that dense???????
Are you that dense???, the only business that cannot change their prices without approval from Congress is the USPS.
USPS is not a business. It is a quasi-government independent agency, which means it is government owned service but self sustaining revenue stream.
The last post was to suggest that laws and regulations prevent any competition in first class mail, thus the prices will then always be higher in that current form, but if on a level playing field as I clearly mentioned before UPS and Fed Ex can change their prices with the market, but the USPS takes months because it is inefficient red tape toppled by mountains of protocol.
Then, do you know understand why there is universal service?
Why can UPS and Fed Ex be more efficient and effective because The Postal Service spends a whopping 78 percent of their budget on labor expenses alone, compared to 60 percent spent by United Parcel Service, and 40 percent spent by Fed Ex.
Why would I be worried about loss of service?
Think about what comes in the mail?
First, most of the first class mail is junk and advertisement. Don't need that.
Second, I have a email address. So, I don't need to send letters through the slow mail.
Third, I can pay most of my bills online.
Fourth, anything else can be handled by UPS and Fed Ex either first class or package.
"Why can UPS and Fed Ex be more efficient and effective because The Postal Service spends a whopping 78 percent of their budget on labor expenses alone, compared to 60 percent spent by United Parcel Service, and 40 percent spent by Fed Ex."
UNIVERSAL SERVICE----------------- If UPS and Fed-Ex had to provide universal service that would mean immediately what...............a much larger labor force. Any company that is the second largest in the country behind the military is going to have what, a large labor expense especially when mandated by the goverment on how to run that business.
"Think about what comes in the mail?
First, most of the first class mail is junk and advertisement. Don't need that.
Second, I have a email address. So, I don't need to send letters through the slow mail.
Third, I can pay most of my bills online.
Fourth, anything else can be handled by UPS and Fed Ex either first class or package."
Now you see an individual whose only thought of is the here and now and truly only himself.
He has an email address so the American public should just put up with not continuing to do business through the mail.
Large businesses that testify in front of Congress that they would lose millions of dollars of business if the USPS even cuts out one day of service,no these Americans have to give this up because Prayerfails has an email account.
Social security recipients be damned, Prayerfails has an email account. I know direct deposit right. Sorry, prayerfails says no USPS,you no longer receive your benefits through the mail.
Why then PF, don't you mail you letters in a box through UPS, you know put some socks in it and send it through Fed-Ex and UPS?
Way to attack me. Do you feel better? Now that you got all that hatred out. Stay on topic.
You are just mad because the USPS has become obsolete where UPS and Fed Ex could easily handle first class mail proved by clear evidence.
What does "anything else can be handled by UPS and Fed Ex either first class or package mean."
So, no, businesses wouldn't lose millions of dollars.
Postage is going up again to 46 cents. Too much of a deficit. 7 billion for 2011.
Does this sound familiar? "At the same time there has been a significant drop in lucrative first-class mail, with more and more people turning to the Internet to communicate with each other as well as to receive and pay bills." Cbs
A sure test of inefficient government owned service.
The USPS made money last year, the deficit was caused(can't believe this has to be explained AGAIN) because the goverment forces the USPS to prefund retiree health benefits which were found to be over-funded by the USPS in the area of 50 to 75 Billion.Congress is now working on allow the USPS to be treated the same as private businesses and fund retiree benefits on a pay as you go system.
You constantly want to talk about the benefits the USPS is given but don't even want to consider the regulations the USPS must follow that would drive UPS and Fed-Ex prices through the roof.If UPS and Fed- Ex were regulated to fund retiree health benefits 100% before the employees retired they would lose money and be less efficient also.If UPS and Fed-Ex were forced to deliver six days per week to ever address even the non-profitable ones, if UPS and Fed-Ex were forced to wait on Congress to approve a rate increase for six months it would drive them out of business also. If UPS and Fed-Ex prices could rise no faster than inflation, how long would they stay in business?
A stamp was .03 in 1863, in 2009 figuring inflation it would cost .52 and you get stamps for .44.The price of a stamp has not risen more than inflation since the beginning of the USPS. A million new deliveries per year and the price of a stamp has gone down according to inflation. UPS and Fed-Ex couldn't handle just the 1,000,000 new deliveries each year without raising costs.
Who could be efficient while being forced to deliver 1,000,000 new deliveries while not raising prices even to the point of inflation?
Supporting Evidence:
Found Money
(www.postalreporternews.net)
Sure, The Postal Service must combat its falling revenue, and discussing changing delivery frequency (supposed guaranteed service), as well as restructuring prepayments of retiree health benefits and other measures.
Do what most private businesses do?
In order to cut the deficit, makes some layoffs.
It is unbelievable to me that the Postal Union has a “no layoff” policy that was negotiated with the USPS.
USPS has needed bailouts from the Fed for the last 3 years. FedEx and UPS don’t need that bailout each year. Overall it would naturally be cheaper because companies adjust their size and operation cost with the demand for their product. Unlike the post office whose employees consider it a “right” to work there.
UPS and Fed Ex relation to regulations pertinent to USPS, fund retiree health benefits and Congress approval of rate increase is irrelevant because they don't need the mountain of red tape.
By the way, inflation is created by the government, more specially the Federal Reserve.
Agreed and I agree there are problems with the USPS. Just wanted to state my opinion on it not just being a case of letting competition deliver first class mail. It is more of a mess than just privitizing.
No, they charge more because they can. Because it is a for-profit industry. If they did not have competition that was non-profit, USPS, they would charge even more.
Competition = better for consumers and more people with jobs. Unlike conservatives us liberals are actually for competition.
See conservatives only like unfair monopolies dressed up as free market. Get rid of USPS and you have less jobs and Fed-ex and UPS make back room deals to drive up prices and carve out sections of the country where they have monopolies. It is exactly what utility companies do and mail would do the same.
Neither PrayerFails or I are conservatives - something you should have caught onto by now. My political beliefs vary greatly so as not to allow me to chose a precise party.
You know I eat meat, would be for the death penalty if I thought they wouldn't just kill innocent people, and literally have never worn tie dye.
Still, I don't have the audacity to claim I am not by and large a liberal.
Basically Western society (even Canada) is split into conservative and liberal wings. Sure issues vary a bit here and there, and they shift through history, but there is a general understanding that these are the driving forces behind modern democracy.
Forgive me, but if one only agrees with Conservatives 80-90% of the time, and liberals about .01% of the time, I'm going to label them Conservative regardless of how uncool being a Conservative today is.
I'll make a deal. Currently there are hundreds of issues facing all nations from healthcare to drugs to wars to schools to space exploration.
Find 10 you agree more with liberals on then conservatives, and I'll call you independant from now on.
96% - a hardcore conservative. You believe in personal responsibility, limited government, free markets, individual liberty, traditional American values and a strong national defense. Believe the role of government should be to provide people the freedom necessary to pursue their own goals.
the post office has been doing this for years and they hire 900,000 people were would those people be if the postal service was privatized? the mail carriers have many advantages that the private sector will never have like getting to know the people on their route
Would universal service be forced upon UPS and fed-Ex???
The USPS must deliver to EVERY address that receives something six days a week for the same price,one thing neither UPS or Fed-Ex even comes close to doing.
Universal service would be forced upon UPS and Fed-Ex if they choose to embark on delivering first class mail. First, they can't because the government says no, otherwise, they have the capability to do so if allowed.
Why should those who live in the urban areas pay for cheap mail for those in rural areas?
They do not have the capability as I stated and others have,this is proven by UPS and Fed-Ex contracting out their deliveries in areas they do not deliver.
These companies would incur huge costs if forced to deliver six days at the same rates.
Both companies charge more on holidays and weekends, the USPS is restricted from doing so.
They do not have the capability as I stated and others have,this is proven by UPS and Fed-Ex contracting out their deliveries in areas they do not deliver.
If you privatize the USPS you will have some unintended consequences.
The reason for the monopoly is that private companies will not and do not find it cost efficient to deliver to all addresses. So, whenever there is any talk of privitizing the USPS, universal service will be eliminated by the market.
Do you want to allow UPS and Fed-ex to only deliver in highly populated areas driving any company with universal service out of business thus eventually bringing about large areas of no delivery? Would that not then bring about a more expensive goverment department to fill the needs of those individuals the private market finds too expensive to deliver to.It already happens as UPS and Fed-ex contract out delivers to the USPS in areas they don't find profitable to deliver to.
Or would allowing a monopoloy for the sole purpose of not having to pay MORE goverment funds to deliver to places the private industries don't want to deliver?
The USPS gets the advantage it does to continue to deliver to ALL addresses.
Is it efficient, no way but in it's years it continues to deliver to every address on every business day. Now, I'm sure the USPS could compete with any business that is forced to do the same exact thing. If UPS and Fed-Ex were forced to service every address that receives something six days a week,you don't think their costs would sky-rocket.
If's it's ever done you would hear the same people complaining because their service was stopped or become much too expensive.
Universal service is what keeps the USPS apart from all others.
If the privatization contract was written to mandate universal delivery, no one can contest that, and I think you'll find that he winner of the contract will use all available means of complying with "universal delivery", even if means subcontracting back to USPS or anyone else. That's part of the beauty of private enterprise, there no rules prohibiting HOW "universal service" must be performed. Also, the USPS business model is outdated, like the contested closing of the Berkley, CA post office. Better to sell those beautiful bldgs for cash and move-into supermarkets, and other places where people naturally congregate in the course of their daily lives.
Finally, USPS's labor costs are way out-of-sight, when compared with UPS & FEDEX.
The chief difference between Government and Business is that a business MUST make a profit, while a public service is provide because it meets an overall social.... you know fuck it I'm tired of arguing with fucking people. Fuck you! Fuck you! Fuck you!
Actually, if it weren't for an accounting requirement in the Postal Reform Act of 2006 to prefund retiree health benefits the Post Office would have been a couple billion in the black for 2008.
Fed-Ex and UPS fund nowhere near because the government prevents them.
The USPS doesn't receive any tax money, so all revenue must be generated by selling stamps and sending packages; OH, wait, that is exactly the same way that Fed-Ex and UPS operate.
They don't fund their pensions and retiree health benefits anywhere near the USPS percentage as mandated by Congress. The USPS pre-funds more than any business or goverment retiree benefits.
PolitiFact | Ad from Save America's Postal Service claims rule from Congress is causing USPS's financial problems, http://bit.ly/12snou1, says this is only HALF CORRECT!
