Should the US Government Bail Out the Post Office?

Thanks to GH for forwarding the following story this morning:

USPS to propose 5-day mail schedule, major cuts

The most important quote:

“USPS posted a $3.8 billion loss in its 2009 fiscal year, the latest in a multiyear string of whopping losses. Mail volume was down 12.7% for the year, a trend the agency expects to continue over the next decade as more consumers opt for online bill payments and message delivery.  The Post Office was $10 billion in debt as of Sept. 30 — not far off from its $15 billion debt limit, which the agency expects to hit in its 2011 fiscal year.”

The USPS will require a bailout, count on it.   Is that a good idea?

Reasons that support a bailout:

1. The USPS is the second largest employer in the United States (behind Wal-mart) – a bailout would preserve much-needed jobs in an economy that is still on less-than-solid footing.

2.  ? (I’m sure there are other reasons that I’m missing..)

Reasons against a bailout:

1. Bailout money will be used to hold down postage prices for junk mailers – some of the largest companies in the world.  (Over 50% of mail volume is junk mail.)

2. Bailout money will increase and prolong the environmental impacts of junk mail.  (I’m not a dyed-in-the-wool green, but even I know that printing credit card offers on felled trees, and flying them all over the country is bad for the environment.)

We should also note the difference between a bailout and a permanent subsidy.  It’s probably a good idea to use government funds to cushion and ease the exit of an information distribution medium that, in the words of the Postmaster General, represents a “macro shift in society.”  It’s a terrible idea to use governments funds to artificially prop up a failing industry ad infinitum.


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