Privatize the USPS? How to Handle the Indebted Leviathan

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The USPS is a Mess. How Should We Fix It?

Postal service debt shows that USPS is another U.S. Government slush fund similar to Social Security. We should either put mail delivery in private hands or spin USPS off from government control.

The USPS is in debt to the tune of 160 billion+ and it is also a quasi-government agency whose unions browbeat the management into funding the pension fund 75 years out. The mandate to prepay employees’ retirement and health-care benefits is an obligation that no non-governmental entity could afford because government agencies are financed by us, let alone private companies that have their debt serviced by the market.

It smacks of socialism; no matter what you, as employees, do to the business/agency, you will be paid indefinitely by the taxpaying public, so you might as well go ahead and destroy the bottom line because even if you are unemployed we will take care of you.

Also, like every other business touched by the feds, the USPS was hamstrung by regulations. They weren’t allowed to seek revenue outside of the post and package delivery arena and not allowed to let the market determine their pricing.

Even more ridiculously, the USPS services every address in the country through local Post Offices and Rural Route delivery service, which means it must maintain a 640,000 person workforce, 200,000 of which are represented by unions (AFL-CIO). Those anti-business unions fight for the highly paid workers and against cost-cutting, modernization, and/or privatization. When unions represent government employees, that pits the government employees against the ownership group otherwise known as the taxpayer. The employees of the USPS, like public school teachers, are organized against providing you with better, more efficient service.

Through arcane funding and ‘ownership’ language, the USPS, formerly known as the Post Office Department, was turned ostensively into a  self-supporting entity with only the most tenuous connection to the federal government. Or that’s what we were led to believe. Here’s the problem: it wasn’t allowed to pursue other forms of income, such as banking, which would have put banking service into every home in America before brick and mortar banks had an internet presence and would have given USPS a branding advantage.

Maybe allowing USPS a head start was not fair either but it would have levelled the playing field for a business that has to deliver mail to the hermit at the end of the two-track road.  On top of that, it would have given everyone who wanted it a bank account (I don’t need explain what cartel of oligarchs killed that idea), making banking easier for everyone and helped make the USPS solvent.

There were other innovations, like beer and wine delivery, grocery delivery, and online payments (internet businesses like Facebook and Twitter stopped that) that the USPS could have expanded into in order to stay solvent. Problem is, despite it ostensibly being mostly detached from the government, Congress stopped it from pursuing those innovations. Congress has insisted that USPS not directly compete with private businesses like FedEx and UPS, but those two and others are able to encroach on the Post Office, so our government has really kept The Postal Service insolvent.

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Also, moves like halting Saturday delivery and offering retirement incentives to thin the giant agency/business of their bloated employee roles would make the USPS leaner and free up financial resources, but those much-needed policy changes haven’t yet happened. And what about privatizing the retirement system by allowing ‘opt-in’ employees to fund a 401k retirement account that would also make USPS competitive, as an alternative to the boondoggle we find ourselves in now, or complete privatization which would thin the herd quickly and raise taxes? Why not allow USPS to innovate?

I don’t know if these initiatives would have worked. There are a lot of moving parts in anything concerning an entity this big with such a long and respected history vis-a-vis its relationship to a society as complex as America’s, but if we stay on the current course, the outcome is fairly obvious.

Don’t get me wrong, I am neither a fan nor an enemy of the Post Office. In fact, I started out this article thinking I was going to be in favor of killing the PO and distributing the assets and responsibilities between successful delivery services UPS, FedEx, DHL, etc.

Unless we want inefficient gov’t to grow larger and larger and larger until there is no alternative but to Federalize everything (like the former Soviet Union), we need to take steps to reduce the size of the government now and the PO seems like the natural place to start. Dialing back the Leviathan is a slow and painful process, people used to being paid a professional’s wages for basic cleric work are going to be hard put to transition to a job with comparable pay and benefits in a shrinking labor market. That is why attrition and buyouts would have to be a major tool for labor reduction.

Bernie Sanders and his crowd, promoting Democratic Socialism, seem to think that a hybrid of philosophies is the grand utopian scheme to solve all of the world’s problems. They think that ‘voting’ to determine who will direct the Leviathan is a sustainable goal. That’s absurd for many reasons.

For example, we have seen how voting in such a system works, the ‘preferred candidate’ is always chosen and the policy goal is always toward larger government and more control. The thought that government control solves anything except the problem of not enough government control is baffling to me because it has always proved itself to be the opposite. They hold up Scandinavian countries as a model but Denmark, Finland, etc. are fiercely capitalist societies that fund generous social programs through taxation. They also don’t have to support militaries because they are protected by NATO.

Think what would have happened to Scandinavia if it weren’t for the mostly US-funded NATO and the protection provided by US strength. It doesn’t take much imagination to see that they would have been eaten by the Soviet Bear faster than a picnic basket by Yogi and Booboo.

Written as a math problem (freewill + gov’t control + force = authoritarianism) no matter where you start, gov’t force determines the ending. Just take the example of Hong Kong; free happy, and successful Hong Kongers were subjected to Chinese authority and when ‘The United States and the ‘Arsenal of Democracy’ didn’t step up, or even speak out, the evil CCP took their freedom by force. This happened on Donald Trump’s watch, but, in his defense, he was fighting for his political life. I believe that fight was against the forces that want the CCP model of authoritarian capitalism to win.

I think we are at an inflection point with the USPS vs FedEx/UPS as well as our government at large. Either we can democratize the giant government bureaucracy that is the Post Office, take it off the budgetary process dole, or compel free enterprise to take on unprofitable paradigms like daily rural delivery as well as a regulated door-to-door delivery in the cities and towns. In one case we take a step away from government control. In the other, we head towards it.

By: David Gignac

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