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Should the government bail out the post office?

Should government bail out / subsidize the post office?

  • Yes

    Votes: 5 41.7%
  • No

    Votes: 5 41.7%
  • Other

    Votes: 2 16.7%

  • Total voters
    12

joko104

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Tens of billions more for GM. What about the post office?

U.S. Postal Service: RIP
Posted Jun 15 2009, 06:05 AM by Douglas McIntyre Rating: Filed under: Internet, Amazon
The U.S. Postal Service, which has been dying for years due to the advent of the fax, e-mail, and overnight delivery, may finally be close to its last act.

The agency lost nearly $2 billion in its last fiscal year and is faced with the serious consideration of cuts of up to 3,100 offices, potentially eliminating thousand of jobs. Media reports say that first class mail volumes are plunging.

What is killing and will probably eventually finish off the Post Office? In a word: “broadband,” the high-speed Internet system that the current Administration plans to build out in the next two years.

According to MarketWatch, the Postal Service is already looking at stopping Saturday delivery. The next moves will probably cut the number of weekdays the mail is dropped off, particularly outside urban areas where the cost of reaching homes and businesses spread over a wide geography is enormous.

Broadband has taken away the need for sending letters and may large documents. Broadband connections allow users to securely download encrypted files, some of which are the equivalent of thousands of pages of paper. The files can be sent and received in a few seconds compared with days to move them by mail.

Payment systems which wire transfer money have nearly eliminated the role of the check in paying bills. This will only increase as e-banking does.

Even the magazine and newspaper industries which relied on physical delivery systems for decades now use the Amazon (AMZN) Kindle as a way to get the printed word over the Internet and downloaded onto the device. Almost every major print product also has an Internet version. Sending magazines via mail is expensive. Cutting back on that form of delivery would be a blessing.

The modern postal system killed the pony express. The USPS could only last so long before it was itself replaced. That time has finally come.

Top Stocks blogger Douglas A. McIntyre is an editor at 24/7 Wall St.
 
Tens of billions more for GM. What about the post office?

U.S. Postal Service: RIP
Posted Jun 15 2009, 06:05 AM by Douglas McIntyre Rating: Filed under: Internet, Amazon
The U.S. Postal Service, which has been dying for years due to the advent of the fax, e-mail, and overnight delivery, may finally be close to its last act.

The agency lost nearly $2 billion in its last fiscal year and is faced with the serious consideration of cuts of up to 3,100 offices, potentially eliminating thousand of jobs. Media reports say that first class mail volumes are plunging.

What is killing and will probably eventually finish off the Post Office? In a word: “broadband,” the high-speed Internet system that the current Administration plans to build out in the next two years.

According to MarketWatch, the Postal Service is already looking at stopping Saturday delivery. The next moves will probably cut the number of weekdays the mail is dropped off, particularly outside urban areas where the cost of reaching homes and businesses spread over a wide geography is enormous.

Broadband has taken away the need for sending letters and may large documents. Broadband connections allow users to securely download encrypted files, some of which are the equivalent of thousands of pages of paper. The files can be sent and received in a few seconds compared with days to move them by mail.

Payment systems which wire transfer money have nearly eliminated the role of the check in paying bills. This will only increase as e-banking does.

Even the magazine and newspaper industries which relied on physical delivery systems for decades now use the Amazon (AMZN) Kindle as a way to get the printed word over the Internet and downloaded onto the device. Almost every major print product also has an Internet version. Sending magazines via mail is expensive. Cutting back on that form of delivery would be a blessing.

The modern postal system killed the pony express. The USPS could only last so long before it was itself replaced. That time has finally come.

Top Stocks blogger Douglas A. McIntyre is an editor at 24/7 Wall St.

This article sounds like it was written by someone who's just figuring out how to connect to the intarweb via AOL dial-up.

Mail volume may decrease, but it's certainly not going to be eliminated like this guy implies. As cool as the kindle is, it's not killing the newspaper or magazine any time soon.

Also:

In a word: “broadband,” the high-speed Internet system that the current Administration plans to build out in the next two years.

wtf is this guy talking about?
 
No the post office should not be bailed out.


What is killing and will probably eventually finish off the Post Office? In a word: “broadband,” the high-speed Internet system that the current Administration plans to build out in the next two years.

Broadband has taken away the need for sending letters and may large documents. Broadband connections allow users to securely download encrypted files, some of which are the equivalent of thousands of pages of paper. The files can be sent and received in a few seconds compared with days to move them by mail.

This person thinks the 'evil Obama administration will use the internet to destroy the world.' :shock:
 
The post office long ago outlived its usefulness. UPS, DHL, and FedEx can do everything it does better.
 
Two wrongs don't make a right. The government should privatize the post office, or at least take the intermediate step of allowing private entities to compete with it without initiating aggression against them!
 
The post office long ago outlived its usefulness. UPS, DHL, and FedEx can do everything it does better.

I'm not so sure about that last part. UPS, DHL, and FedEx aren't exactly the best options for low weight, high volume, low priority mail. When you need to get something heavy, somewhere quickly, you go with one of those three (well, I don't like DHL, bad experiences with them compared to the other two). When you need to mail a letter slow, cheaply and in high volume, those aren't the first options.
 
The post office is like any other company. If it is experiencing cuts, then it needs to reduce its supply. I doubt the WHOLE company would collapse because of harsh times that all industries are facing.

Also, even though I support the US postal service, I would be fine if another company moves in to compete against it. Unlike when this country was created, the postal service no longer needs to be run by the government.

So help isn't needed from the government for the postal service.
 
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I'm not so sure about that last part. UPS, DHL, and FedEx aren't exactly the best options for low weight, high volume, low priority mail. When you need to get something heavy, somewhere quickly, you go with one of those three (well, I don't like DHL, bad experiences with them compared to the other two). When you need to mail a letter slow, cheaply and in high volume, those aren't the first options.

Agreed.

$.42 to send a physical piece of paper 3000 miles to someone elses door in 2 days time is a mind-boggling bargain.
 
Agreed.

$.42 to send a physical piece of paper 3000 miles to someone elses door in 2 days time is a mind-boggling bargain.

What is the cost per letter when you add the government funding to the 42-cent user fee? I doubt it will look like such a bargain.
 
I'm not so sure about that last part. UPS, DHL, and FedEx aren't exactly the best options for low weight, high volume, low priority mail. When you need to get something heavy, somewhere quickly, you go with one of those three (well, I don't like DHL, bad experiences with them compared to the other two). When you need to mail a letter slow, cheaply and in high volume, those aren't the first options.

The government mail monopoly actually costs quite a bit more, you're just not paying for it directly.
 
The post office long ago outlived its usefulness. UPS, DHL, and FedEx can do everything it does better.

I disagree that these other companies do better than US Postal. In fact, they don't really do the same thing at all. There aren't UPS, DHL, and FedEx showing up at my mailbox every day. In order to get them to do so, there is a fee and that is just for my mailbox.

These other companies also don't deliver advertisements, what most call junk mail. That may not be a big deal for you and I, but to those who are paying for that advertisement, its a huge deal.
 
Well, let's fix the Post Office according to sound liberal principles.

Raise rates until revenues equals expenses and shut down those pesky FedEx and UPS upstarts.

And, oh, I almost forgot, tax e-mails at the same rate it cost to send a private letter by snail-mail.

That'll fix the Post Office right up. I mean, we can't let 800,000 overpaid goonion democrat jobs go up in a puff of pure socialist business incompetence, can we?
 
Mail volume may decrease, but it's certainly not going to be eliminated like this guy implies.

True: The USPS more than likely will not be eliminated. However it will continue to decline in volume.

As cool as the kindle is, it's not killing the newspaper or magazine any time soon.

False: Newspapers and magazines make their money in advertising. I have virtually eliminated newspaper advertising for my business, and diverted that money towards other advertising media(primarily internet) and have much better results. Fewer and fewer people are reading the newspapers, thus fewer and fewer business will be spending as much in newspaper advertising. That's why so many newspapers are going bankrupt.
 
I'm not so sure about that last part. UPS, DHL, and FedEx aren't exactly the best options for low weight, high volume, low priority mail. When you need to get something heavy, somewhere quickly, you go with one of those three (well, I don't like DHL, bad experiences with them compared to the other two). When you need to mail a letter slow, cheaply and in high volume, those aren't the first options.

People that need to send letters slow, cheaply, and too much, should contract to a private business.

I'm fairly certain the Founding Fathers did not envision the postal service they required the Congress to establish to be a means of delivery the nation's pulpwood forests to all the homes in America one unread letter after the next.
 
Mail volume may decrease, but it's certainly not going to be eliminated like this guy implies.

True: The USPS more than likely will not be eliminated. However it will continue to decline in volume.



False: Newspapers and magazines make their money in advertising. I have virtually eliminated newspaper advertising for my business, and diverted that money towards other advertising media(primarily internet) and have much better results. Fewer and fewer people are reading the newspapers, thus fewer and fewer business will be spending as much in newspaper advertising. That's why so many newspapers are going bankrupt.

It still won't kill them off. At least not any time soon.

They said the same thing about email. What a revolutionary tool, it will kill off the post office, letter writing, and paper use.

While that change may occur, there is still businesses and services who are going to find a return for using old school print advertising.
 
What is the cost per letter when you add the government funding to the 42-cent user fee? I doubt it will look like such a bargain.

The postal service generally does quite alright for itself. It was turning profits of several billion dollars a year not too long ago.

True: The USPS more than likely will not be eliminated. However it will continue to decline in volume.

False: Newspapers and magazines make their money in advertising. I have virtually eliminated newspaper advertising for my business, and diverted that money towards other advertising media(primarily internet) and have much better results. Fewer and fewer people are reading the newspapers, thus fewer and fewer business will be spending as much in newspaper advertising. That's why so many newspapers are going bankrupt.

The fact that newspapers are struggling doesn't mean that the kindle has anything to do with it, which is what this guy was claiming. Furthermore, the whole point of magazines is that they have nice glossy pictures, something you can't get on your blackberry. Finally, while the newspaper industry as a whole might be having problems, the NY Post at 50 cents will always be around.
 
People that need to send letters slow, cheaply, and too much, should contract to a private business.

I'm fairly certain the Founding Fathers did not envision the postal service they required the Congress to establish to be a means of delivery the nation's pulpwood forests to all the homes in America one unread letter after the next.

And there's the problem that you face. The postal service is Constitutional power of the Congress:

Article 1, section 8 - The Powers of Congress:
"...To establish Post Offices and Post Roads;"

I'm also fairly certain that the Founding Fathers didn't envision that the post roads would become anything like the Interstate system. That doesn't change the fact that Congress is responsible for them.

I'm also fairly certain that the Founding Fathers didn't envision the commerce clause being used to justify unconstitutional actions such as the the Drug War.
 
The postal service generally does quite alright for itself. It was turning profits of several billion dollars a year not too long ago.



The fact that newspapers are struggling doesn't mean that the kindle has anything to do with it, which is what this guy was claiming. Furthermore, the whole point of magazines is that they have nice glossy pictures, something you can't get on your blackberry. Finally, while the newspaper industry as a whole might be having problems, the NY Post at 50 cents will always be around.

Newspapers will continue to struggle. Many will fold, and the ones that survive will have to radically change their ways of operating.
 
The government mail monopoly actually costs quite a bit more, you're just not paying for it directly.

I don't doubt that it costs more. The question is how much. How many pieces of mail does it deliver and how much does it cost to operate a year?

From Fox, during the current bad year, it delivered 180 billion piece of mail.

Extrapolating the operating budget from CNN, the cost to operate is around $75 billion. Throw in a deficit of $7 billion and we've got a grand total cost of $82 billion. That's 45 cents per piece of mail.

Postal service threats to cut a day of mail delivery - Jan. 28, 2009

Tack that on to current mail prices and it's under $1. Sure it's higher, but have you seen the costs for FedEx/UPS for 2 day letter? It's not a dollar.

After a little more researching, the actual cost to taxpayers is $3.6 billion, with the deficit it's $10.6 billion. So 5.8 cents in subsidiaries per piece. Not exactly material if you ask me.

USPS - Postal Facts
 
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The government mail monopoly actually costs quite a bit more, you're just not paying for it directly.

I missed part of your post

Is it a monopoly?

USPS's revenue is $72 billion
UPS's is $11.6 billion
FedEx is $6.1 billion

I'd agree it LOOKS like a monopoly from revenue numbers, but how about from profit numbers?

Clearly, USPS is in the tanker.

FedEx is around $500 mil in profits.
FedEx reports higher earnings and revenue - Dec. 18, 2008

$986 million for UPS
UPS revenue, profit up, but miss Street expectations - Business First of Louisville:

Last I could find for USPS profits was $1.4 bil for 2005
USPS Ends Year with a Profit

Now let's do net profit margins.

USPS - 1.9%
UPS - 8.5%
FedEx - 8.1%

I'm pretty sure no one is surprised that the government owned does the worst.

In terms of market, USPS has 80% market share. So by at least that measure it is.

But how do we define monopoly?

[ame=http://en.wikipedia.org/wiki/Monopoly]Monopoly - Wikipedia, the free encyclopedia[/ame]

In economics, a monopoly (from Greek monos , alone or single + polein , to sell) exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.[1] Monopolies are thus characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods.[2]

I don't think that the USPS has a monopoly. Especially when people are free to choose (and do choose) private firms all of the time.

One aspect that I like how johnjoel brought up is how it facilitates business. It provides a low cost method of advertising, bill payments and communication for the business world. While that may be more relevant about a decade ago, it still holds true, abet to a lesser degree/
 
I don't think that the USPS has a monopoly. Especially when people are free to choose (and do choose) private firms all of the time.

They are a monopoly when it comes to standard mail delivery.

It's illegal for someone to set up a standard mail delivery service.

One aspect that I like how johnjoel brought up is how it facilitates business. It provides a low cost method of advertising, bill payments and communication for the business world. While that may be more relevant about a decade ago, it still holds true, abet to a lesser degree/

You should read about how private firms where handling it prior to it finally being declared illegal.

Privately owned mail delivery services were going to be apart of our country.
 
[...] I don't think that the USPS has a monopoly [...]

"Monopoly" is a relative term - rarely do you truly have the only one possible way of doing something. In my opinion it only applies to situations where there are barriers to entry for new competition. A company having a large market share is not in of itself a monopoly - Microsoft isn't, for example, because anyone can switch to Linux / BSD / Solaris / etc if they so choose. There are, however, specific laws that prohibit private sector companies from competing with USPS in certain market segments.

Notice the link to Anarcho-Capitalist hero Lysander Spooner's American Letter Mail Company in my previous post. He was able to provide postal service better and cheaper than the government, but Uncle Sam initiated aggression against him, as they would against UPS / FedEx if they ever start to offer delivery of standard (non-urgent) mail, or go below a certain price, etc. :(
 
The postal service generally does quite alright for itself. It was turning profits of several billion dollars a year not too long ago.

How are you calculating profits? Total revenue minus total expenses? Or total sales minus total expenses? Any government agency can show a "profit" if the government just gives them more money than they need. That doesn't mean they're actually profitable.

For some reason it's difficult to find any information on how much revenue the USPS receives from its own sales, compared to how much it receives from the federal government. But I would doubt you could get 42-cent letters if not for the feds subsidizing your mail.
 
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The government owns the postal service, how is it a bailout. I mean, I know it's supposed to be revenue neutral, but I don't see it as a bailout. Plus the post office is a good thing, we can keep it going. We spend a lot more money on a lot worse things.
 
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