The United States Postal Service (USPS) is in the Wrong Business - How USPS Rates are Raised

Submitted by Patrick Grote on Fri, 12/10/2004 - 2:40pm.

The United States Postal Service (USPS) wants to raise rates again. This time the USPS has requested a 5.4% across the board increase for all postage rates. A first class stamp would go from 37 to 39 cents. The rate increase is being made in light of Public Law (PL) 108-18. Don't know what Public Law (PL) 108-18 is for? Neither did I until now.

The USPS has a very simple charter. It exists as a monopoly to ensure first class letters are delivered. Period.

Many people don't know that the USPS is a corporation owned by the government and it's self funded. Since 1970 no taxes have gone to support the USPS.

The USPS was set up, according to United States Code Postal Service, to handle basic mail services. What the USPS has morphed into is something more akin to a corporation run amok. For instance:

  • Express Mail: Why does the USPS offer this? It's outside their scope.
  • Sponsorships: Why does the USPS sponsor sporting events? There is no alternative to the USPS for first class and other types of mail.
  • Advertising: Why do they advertise? It's not like there's a choice for first class and other types of mail.

When the USPS goes into areas they don't belong it costs more and delivers less. Thanks to the Private Express Statutes the USPS has a distinct monopoly on what they handle. They don't belong in these other areas.

So now the USPS has to deal with Public Law (PL) 108-18, which calls for an increase in the amount of funds they have in their pension. This means that the rates are going up not to increase service, but to pay for possible retirements.

Some people have called for the monopoly to end and move to electronic communication. It doesn't need to go this far; just limit the USPS to what they should be doing.


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