Misconception of the postal service

[Sematary]

First (and many people don't realize this)

The Postal service is expressly authorized by the constitution under the Powers of Congress:

To establish Post Offices and Post Roads;

Second point - and something ELSE that people don't understand:

The Postal Service is NOT supported by taxpayer funds.

Third, and final point:

The Postal Service is not permitted to make a profit - even though it could.


I see this argument where people say that postal workers don't support RP because they support "big government". Postal workers are no different than you or I. They want the same things we do and a smaller government would not affect the postal service in any way, shape or form.

[smhbbag]

Well, 1 out of 3 is true :)

[Starks]

My post office makes a huge profit on stamps each day...

[Sematary]

Well, 1 out of 3 is true :)

It's all true.

[Sematary]

My post office makes a huge profit on stamps each day...

YOURS may. There are plenty of post offices that lose money every day because they are there to serve the community, not make a profit.

[kylejack]

Well, 1 out of 3 is true :)

Its all true. They run a positive budget with postage fees. They're a great example of why many government services could be handled by the free market.

[smhbbag]

http://www.lewrockwell.com/alston/alston21.html



Digging a little deeper provides the truth: the USPS is subsidized. One need only refer to the 2005 annual report to get some illustrative numbers. A line item showing as "U.S. government appropriations — received" lists an amount of $503 million. The 2003 annual report shows a similar line item with a similar heading. That line item lists an amount of $762 million. Call me a nitpicker, but those listings both sound suspiciously like, well, government appropriations, A.K.A. taxpayer investment, to me. Looking further into the 2005 annual report we find this.

"We commenced operations on July 1, 1971, in accordance with the provisions of the Postal Reorganization Act (the Act). The equity that the U.S. government held in the former Post Office Department became our initial capital. We valued the assets of the former Post Office Department at original cost less accumulated depreciation. The initial transfer of assets, including property, equipment and cash, totaled $1.7 billion. Subsequent cash contributions and transfers of assets between 1972 and 1982 totaled approximately $1.3 billion, resulting in total government contributions of approximately $3 billion."

So even without the (apparently) semi-annual infusions of "government appropriations" the USPS received something like $3 billion in "start-up" capital. That is about as far from "no taxpayer support" as one can get! Additionally, these are economic benefits that private companies such as FedEx, UPS, and DHL do not receive and they are still kicking the Post Office's butt in the realm where the USPS is not protected by fiat. (Have you seen the FedEx boxes placed outside the USPS recently?) Clearly the USPS benefits from government subsidy, no matter what they choose to call it. Now back to the question at hand: how might things be different with competition?


And add to all of this: no taxes on when their "profits" when or if they have them...exemption from parking tickets, OSHA standards, and a hundred other costs private carriers must deal with, etc...oh, and the ability to borrow from third parties with the "full faith and credit" of the US Government behind them, lowering their borrowing cost.

I don't have much time to talk about this stuff now, but this should suffice.

[aunt_shoes]

Where in the Constitution is the post office allowed to compete with businesses in matters not to do with mail?

Is is Constitutional for them to sell phone cards, greeting cards, etc?

Other than the recent inclusion of other agency pensions, when was the last time the post office in total didn't make a profit?


I believe they are not the only govt agency that makes a profit. Doesn't that 3 letter group that owns the companies that put in the music systems for lots of businesses also turn a profit (that of course they put back in)?

[Sematary]

Where in the Constitution is the post office allowed to compete with businesses in matters not to do with mail?

Is is Constitutional for them to sell phone cards, greeting cards, etc?

Other than the recent inclusion of other agency pensions, when was the last time the post office in total didn't make a profit?


I believe they are not the only govt agency that makes a profit. Doesn't that 3 letter group that owns the companies that put in the music systems for lots of businesses also turn a profit (that of course they put back in)?

The postal service is not ALLOWED to make a profit.

[akovacs]

The post office does NOT generate enough revenue to cover its expenses. It's taxpayer subsidized.

It is definitely constitutional (It was one of the first departments set up I think), which is why Paul isn't saying get rid of it. He just wants there to be open competition with it.

[kylejack]

The postal service is not ALLOWED to make a profit.
Citation?

[Sematary]

The post office does NOT generate enough revenue to cover its expenses. It's taxpayer subsidized.

It is definitely constitutional (It was one of the first departments set up I think), which is why Paul isn't saying get rid of it. He just wants there to be open competition with it.

The postal service is (again) NOT subsidized. It is only ALLOWED to break even - no more. Break even means not losing (or making) money.

[kylejack]

The postal service is (again) NOT subsidized. It is only ALLOWED to break even - no more. Break even means not losing (or making) money.
Then can you explain why their budget reports government appropriations? Are you saying they spend away the exact dollar amount needed to be revenue neutral? Do you have any sources for ANY of this?

[akovacs]

The postal service is (again) NOT subsidized

Did you not read the lewrockwell article posted earlier? It gets annual appropriations for its operation. That is the government giving money directly to the post office. If it was breaking even, this wouldn't be necessary.

[Sematary]

Did you not read the lewrockwell article posted earlier? It gets annual appropriations for its operation. That is the government giving money directly to the post office. If it was breaking even, this wouldn't be necessary.

If they DIDN'T give them appropriations then Congress would have no control. They don't need the appropriations. They COULD make a profit - if they were allowed to.

[kylejack]

If they DIDN'T give them appropriations then Congress would have no control. They don't need the appropriations. They COULD make a profit - if they were allowed to.
You're not making any sense. If taxpayer dollars get appropriated they are subsidized regardless of what they could accomplish.

[Sematary]

You're not making any sense. If taxpayer dollars get appropriated they are subsidized regardless of what they could accomplish.

I don't believe they need the money. They do it as a means of control.

[akovacs]

OK, so let me sum it up here:

1. The post office gets money from congress every year.
2. The post office does not generate revenue to cover its expenses
3. The money given does not constitute a subsidy even though it's meant to cover shortfalls every year, and the stamp prices are artificially low.

Have I got that right?

[kylejack]

I don't believe they need the money. They do it as a means of control.
What you believe doesn't matter. Some people believe in unicorns. Cite some sources or give up on this.

[Sematary]

OK, so let me sum it up here:

1. The post office gets money from congress every year.
2. The post office does not generate revenue to cover its expenses
3. The money given does not constitute a subsidy even though it's meant to cover shortfalls every year, and the stamp prices are artificially low.

Have I got that right?

If I understand their charter correctly, they are PROHIBITED from making a profit. Actually, I believe they HAVE to remain 1% below break even - so Congress can give them their control appropriation. It is not a matter of being UNABLE to be profitable. It is a matter of control. Period.

It works the same with everything Congress does.
You ever wonder why EVERY state has a drinking age of 21? It's not because all states believe it should be. It's because Congress holds highway funds hostage if they DON'T make it 21. This is no different - It is a club to keep control.

[kylejack]

Stop postulating and start citing a source.

[akovacs]

If I understand their charter correctly, they are PROHIBITED from making a profit.

Have I said anything about making a profit? You can still break even and not have to take money from Congress.

What everyone is trying to say is that taking money from the government because your revenues do not cover your expenses is the definition of a subsidy, and you're saying that it's not.

[tangent4ronpaul]

In trying to "just break even", they have one huge problem - gas prices!

how would you like to budget what your going to spend in the next year, including every gallon of gas you will buy?

-n

[akovacs]

how would you like to budget what your going to spend in the next year, including every gallon of gas you will buy?

OK, let's say they CANNOT, under any circumstances, make a profit, and that they have to plan at making a loss to be legally in the clear... (BTW, that's still a subsidy, though a legally required one)

I think it's incredibly bad planning that the closest they could get to a break-even and feel safe is $503 million. I would think they could at least plan it to be within a few million of that point.

[tangent4ronpaul]

have you got any idea how many postal vans they have? not to mention semi-tractor trailers and aircraft? A fluctuation of a cent or two in gas prices equals millions of dollars a day for them.

USPS has a monopoly on first class mail, but has competition for package delivery - UPS, FedEx, etc.

-n

[Sematary]

Regardless of how anyone feels about the postal service, or the reasons why Congress budgets a certain amount for them - the postal service is chartered by the Constitution.

[tangent4ronpaul]

btw: the gvmt sends out WAY MORE than 503 Million in mail, if they were charged postage - so in effect, they are making a profit and the US public is underwriting the gvmt being able to send mail.

-n

[smhbbag]

Regardless of how anyone feels about the postal service, or the reasons why Congress budgets a certain amount for them - the postal service is chartered by the Constitution.

Yes, but....

The Constitution does not grant it a monopoly on first-class mail. It does not provide for 'full faith and credit' allowance for its borrowing. It does not allow for USPS exceptions to the legal/regulatory environment foisted on all other businesses. It does not grant it favorable tax status.

And the list could go on and on.

I would like to amend the Constitution to get rid of the Post Office, but it's obviously a low priority. The Founders were wrong on this one.

But, at the very least, competition should be fair and the USPS subject to the same rules as all other players in the game. And doing that does not require a change in the Constitution.

[JosephTheLibertarian]

We have to get rid of it somehow. It's not a big deal to me, however :) Although we should really think about legalizing competition so that we can (maybe) phase it out without ever damaging the mail delivery. Whats' wrong with legalizing competition? I do admit that just shutting it down would not be good lol legalize competition for now and reassess the situation when private companies get settled. If they're losing money, how can they have any money to operate? The money has to be coming from somewhere?

[ronpaulhawaii]

On a side note, the only truly hostile reaction I got on my walk around Oahu, was a postal worker, (behind a hedge, like a disembodied voice yelling at me). He was yelling about how Ron Paul wanted to take his job. I started to try to engage the voice, but it was a bit surreal and he was a bit... loud. So I just moved on. Thought it was kinda strange that the guy seemed to think the mail would stop in an RP presidency, or perhaps sad that he was afraid of a little competition.

[TruckinMike]

I stilll dont like the government funded competition with the private carriers.--- It just seems wrong.

Truckinmike

[spiteface]

Third, and final point:

The Postal Service is not permitted to make a profit - even though it could.



This is the greatest assurance that the PO is indeed a Big Government agency. Thanks for presenting evidence to contradict your own point.

[Nash]

My issue with USPS isn't necessarily because it's a government agency, but that it's a monopoly.

It is against federal law to deliver mail if you're not a USPS employee and that is the problem.

They should simply repeal this law and let UPS, Fedex and DHL jump into the market too. I don't see any problem with that and it would serve the people better.

[Nash]

I stilll dont like the government funded competition with the private carriers.--- It just seems wrong.

Truckinmike

That's the thing though, the other "carriers" can only compete with parcels not with mail. UPS cannot deliver mail, it is against federal law.

[foofighter20x]

Second point - and something ELSE that people don't understand:

The Postal Service is NOT supported by taxpayer funds.

Sorta true, sorta false. The USPS does operate on the cost of postage, yes, but it gets bailed out by the gov't whenever it can't pay the bills.

[JosephTheLibertarian]

I stilll dont like the government funded competition with the private carriers.--- It just seems wrong.

Truckinmike

you need a transition period. unless you're okay with receiving no mail for a bit?