In a blog post mostly devoid of actual facts, radio personality Clark Howard suggests that the USPS needs to be privatized. Howard claims that the USPS lost “almost $9 billion” last year. The actual figure was $8.5 billion, but Howard seems oblivious to the facts behind that number. As most readers will know, $5,5 billion of the “loss” was due to the annual “trust fund” payment mandated by Congress since 2006. A further $2.5 billion resulted from the required revaluing of the USPS’s future workers comp liability- a non-cash accounting entry caused, not by anything the USPS did or didn’t do, but by changes in long term interest rates. The USPS’s actual operating loss was about $500 million.
Like the Washington Post and numerous other news outlets, Howard isn’t interested in the facts, especially if they don’t fit his preconceived solution- what else- privatization!
The USPS has really taken it on the chin in so many ways in the past. Last year, the postal service lost almost $9 billion. The business model is simply not sustainable any more.
So I expect you’ll be seeing a big fight with politicians grandstanding and saying that you can’t close this post office location or that one. But I think the whole entity should be sold off to a private vendor, period.
Now, don’t get me wrong. What we pay for postage is actually very reasonable. But I still think the answer is to sell the postal service off and get rid of it being an obligation of the federal government. Let the free market figure out how to best deliver mail.
Howard and the others cling to the belief that private companies are just dying to get into the mail delivery business. It doesn’t make sense, of course- why would investors be interested in a business that you claim is not sustainable?