The increasingly troubled United States Postal Service today announced an annual loss of $5.1 billion in the face of declining mail volume.
Discussions of postal reform tend to get bogged down in rather technical details about the specifics of the union contracts and the unusual accounting rules around USPS pensions. But if the Postal Service were a private firm, you’d say that its problem is pretty simple — thanks to technological innovation, people don’t want to send as much mail as they used to and there’s no reason to believe that trend will ever turn around. The fundamental issue the country needs to think about is whether subsidizing regular mail delivery to rural areas is actually an important policy priority in the modern day. Back in the late-18th and early-19th centuries, the fact that the United States had an efficient postal service meant we were in possession of cutting edge communications infrastructure. It was the equivalent of having South Korea’s broadband. Today, that doesn’t seem very plausible to me. Some people of course would prefer not to pay market rates for mail and parcel delivery, which is nice for them, but I don’t think it serves any compelling policy purpose beyond tradition.