Hudgins article on USPS published in Investor's Business Daily

July 16, 2013 -- Today's Investor's Business Daily carries a story by Ed Hudgins about the ongoing financial meltdown of the USPS. Hudgins argues for ending the U.S. Postal Service's monopoly:

"USPS income actually peaked in 2008 at $74.9 billion and then declined to $65.2 billion last year.

But the big problem was that expenses last year were $80.9 billion. A large portion of that $15 billion loss resulted because the USPS is required to put aside money to cover future pension liabilities. But even without those pensions, losses will continue in the future.

The USPS has reduced its number of employees from a peak of nearly 800,000 in 1999 to 528,000 in 2012 through attrition and other mechanisms. But this is still not enough to make the USPS solvent.

The fundamental problem with the USPS is that it has a monopoly on carrying letter mail as well as on the use of all mail boxes. And it is mandated to deliver mail to every address in the country.

Why not simply eliminate its monopoly, sell it off as a whole or in parts to the private sector, and let the market sort out the specifics of how mail and packages will be delivered and at what costs?

The problem is political. Postal Service unions are very effective at lobbying for the status quo. And many policymakers feel that some sort of plan is necessary that ensures continued mail delivery. Right or wrong these concerns must be addressed.

I was a contributor to a white paper suggesting a hybrid model that can offer real, doable reform. To understand how the current system can be reformed, think about the actual functions that constitute "postal service" rather than the USPS."   Read more >

EXPLORE:

Restructuring the U.S. Postal Service: The Case for a Hybrid Public-Private Partnership
by Ed Hudgins, Ed Gleiman, George Gould, and John Nolan

This Paper proposes the development and implementation of a new model: a hybrid Public-Private Partnership. Under this proposal, the U.S. Postal Service would be responsible for the “last mile” of delivery and pickup, and the private sector would be responsible for handling all other aspects of the mail system.

The Last Monopoly: Privatizing the Postal Service for the Information Age
Edited by Ed Hudgins

Mail @ the Millennium: Will the Postal Service Go Private?
Edited by Ed Hudgins

Edward Hudgins is the former director of regulatory studies for the Cato Institute and editor of Regulation magazine, and is the author of two books on postal service privatization. He currently is director of advocacy for The Atlas Society.

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