A conservative friend of mine and I had a light economics discussion over email recently that started with this question:

“If you had a choice (& it wasn’t extracted by taxes), would you really choose to give your hard earned $$$ to an organization that is so inefficient?”

We’ve been fooled into believing that anything the government touches is pointless and wasteful. Not to say that reputation wasn’t earned at some point, or that they do everything flawlessly, but some things they do — in this case the post office — are done pretty well.

The post office’s annualized revenue is $67bn, with an annualized loss of $6.8bn in a year, or approximately 11% of their gross revenue. They deliver 152 billion pieces of mail per year — this equates to about $0.04 per piece of mail. It should also be noted that profit isn’t the government’s motive; in most cases like this, their motive is to provide a service that the free markets cannot. A 11% loss is much less of loss than most agencies of government, not to mention the amount is just over 1% of total defense spending. Plus, this loss is also a pretty recent phenomenon. It has only been in the past few years there have been a shortfall at all, which could be rectified if it weren’t so closely controlled by Congress.

As far as efficiencies are concerned, for curiosity, I called a mail box shop and was asked the owner that if I wanted to deliver a check to someone in Los Angeles (I am in New York) using the cheapest method possible, what would it cost me — if I didn’t use the USPS. $10 he said. The postal service charges $0.49, and if you put the other $0.04 loss on top of it you come to $0.53. The private enterprise’s cheapest method is 20x more expensive.

As to the constitutionality of it… The postal service was founded in 1775, by Benjamin Franklin, who was arguably the most influential founder of the United States, and the only founding father who signed all four of the major documents of the founding of the United States, including the Declaration of Independence and the Constitution. And there is a section of the Constitution dedicated specifically to the postal service — therefore I think it is reasonable to assume that the founding fathers, as well as today’s Supreme Court, would have to agree that not only is it a necessary role for the government to play, it is a mandatory one.

So after all that, if one would ask me would I write a check for $1.80/month ($6.8bn loss / 315m people in the US) to ensure I have a mailbox in front of my house and on nearly every street corner to which I can insert a document or check and have it (as near guaranteed as it doesn’t matter) arrive at a destination basically anywhere in the United States in a few days for $0.49, and receive a birthday or thank you cards, PLUS keep 570,000 people employed doing so would I?

Yes, no question.