Evidence Government Monopoly is Inefficient

Notwithstanding its legal monopoly of letter carrying and exclusive access to citizen mailboxes, 18 U.S.C. 1693-96; 39 U.S.C. 601-06, the U.S. Postal Service is expected to default on its $5.5 billion payment into its pension fund. While it is true that the U.S.P.S. hasn’t directly received taxpayer dollars since the early eighties, there hasn’t been any pressure to adapt to the recession, or to “fundamental changes in America’s use of mail.”

via Senators blast House leaders over US Postal Service default | Reuters.

But what about private carriers that are forced to compete on the market? Here’s Fedex’s profits since 2000:


And here’s UPS’:

 

If the government wants to save the Postal Service, take away its monopoly and expose it to market pressures.

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One thought on “Evidence Government Monopoly is Inefficient

  1. I actually read an op-ed about this in the Times. Apparently, the Post Office makes a profit off its business activities – carrying the mail. The reason it is so far in the red is because it has to pre-pay its pension obligations, which was a requirement passed by Congress to ensure it would never default on pensions. This requirement could be changed easily by Congress, preventing defaults and allowing the Post Office to be profitable without changing the entire structure. However, I think Republicans just don’t like the idea of the government running anything, so this option is not even on the table.

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