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USPS is in a strange boat where a lot of people insist that it must be profitable, much like UPS or Fedex, while failing to realize the value it provides to the rest of the economy by being cheap. Last time I had to physically mail a check I was shocked that it costs 10-20x as much to use UPS or Fedex than it did for the USPS.
>USPS is in a strange boat where a lot of people insist that it must be profitable, much like UPS or Fedex

This isn't really accurate. USPS had a break even (not profitability) legal mandate since 1970-2006. They would adjust prices each year to hit break even. And that's what happened - they roughly broke even each year.

After a 2006 with broad bipartisan support, the UPS was able to make a profit (not just break even) but a price cap was added (to be reviewed every 10 years). They couldn't raise costs beyond inflation. A stamp to send to anywhere in the USA - anywhere (Alaska, Guam, etc.) - currently costs 82 cent. The postal union is against this, usps management is against this, and business mailers are for it. Dont you love all the ads USPS delivers you?

They have not been break even since 2007. They currently lose about $9B/year with $2.7BM being controllable and the rest largely being pensions, retiree health plans, and workers comp charges. Their core business (mail) has been declining for 20 years and no end is in sight. In 2020 they loosened the cap a bit (allowing USPS to raise prices). Business mailers tried to sue them but lost.

So this attitude that they should just lose a bunch of money and be backstopped by the taxpayer, when mail is less critical than ever, is an recent idea and is aligned with business mailer lobbying interests. It seems obvious to me that they should just go back to the break even mandate.

>The postal union is against this, usps management is against this, and business mailers are for it

I was confused by this until I realized you are missing some logical steps in your (accurate) argument.

The 2006 law took away the safety net (ie the ability to charge whatever is needed to break even).

The “you can now make a profit” rule actually made it HARDER since it came with a price cap.

It told the USPS: You can keep any profits you make, but you cannot raise prices above the rate of inflation to get them.

This forced the USPS to absorb rising costs through internal efficiency rather than passing the bill to mailers

Yes, thats exactly right. The ability to profit was granted and they were kneecapped by the price cap. They haven't profited since the legislation and immediately started incurring large losses. That's all in my comment already.

By no means was I implying that the ability to profit means they did profit. Im just stating what the law was.

I didn't know what your point was either..
Yes, it's the price cap which is the issue.
In 2006 a law was passed requiring the USPS to fund pensions far in advance, a requirement no other business had, which instantly put them deep in the red. This wasn't fixed until 2022. But it was just this phony accounting that messed them up, more than the other factors you mention.
>In 2006 a law was passed requiring the USPS to fund pensions far in advance, a requirement no other business had, which instantly put them deep in the red. This wasn't fixed until 2022.

No because they are still deep in the red, about $9B a year.

That’s $2B less than the first six days of the Iran war ($11B). We could just cut a check each year from the general fund. It’s a paperwork issue. The fact that we can spend $100B+ on an illegitimate conflict on a whim while costs like this are bikeshedded over boggles my mind.

US Military costs ~$1T/year and the Pentagon hasn’t passed an audit in the last eight years, comparatively, but not a lot of similar complaints of that waste versus pensions for workers operating and serving a national public service agency.

https://www.militarytimes.com/news/pentagon-congress/2025/12...

Electrifying the USPS light vehicle fleet is expected to generate up to $4.3B in lifetime savings over the fleet lifecycle, similarly.

https://huffman.house.gov/media-center/in-the-news/electrify...

https://atlaspolicy.com/federal-fleet-electrification-assess...

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>a requirement no other business

True, but isn't this because everyone knows that USPS is a dying business already?

It's not a business; it's an independent agency of the executive branch. The persistent attempts to view it as a business are a category error and the difference between public and private sectors.
Some would say it’s the unfunded pensions that are the phony accounting
No one else had to set aside money 75 years in advance, for a debt not due for 75 years. That's not legitimate accounting.
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It would be great to raise prices on spam business mailers without raising prices on normal people
They sort of do this by having the spam business mailers package/submit in ways which cost USPS less to deliver, and the discount is less than the savings. Also covers fixed costs due to volume, which is important due to universal service obligation.

(I have all my mail sent to a CMRA and basically never see any of this stuff, though.)

Totally. It's 90% of the mail. It's junk.
> So this attitude that they should just lose a bunch of money and be backstopped by the taxpayer, when mail is less critical than ever, is an entirely new idea and is aligned with business mailer lobbying interests.

Not when combined with the idea that spam mail senders should be legislated out of legality.

If USPS could set whatever price they wanted on business mailers they could completely price them out or make them pay more for it.
The problem is that there are categories of spammers willing to pay more than what the poorest regular people can afford. Much more reasonable to make junk mail illegal just like other countries already have.
That’s not actually value if it’s just enabling waste. Think of all the junk mail, bills that could be emails, etc. In your very example, why mail a check? You could do ACH or another type of EFT.

The only steel-man argument is that USPS provides coverage for that last 1%, living in the boonies, unable or unwilling to use a computer. But that’s at huge cost to everyone else, so much so that we should just give those people a computer and a 1Mbps Starlink connection for free to enable us to get rid of USPS.

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The US does a terrible job at explaining the benefits of departments like the USPS.
>while failing to realize the value it provides to the rest of the economy by being cheap

but that "value of being cheap" is provided to the people using the mail (or other delivery services) for that transaction; it does not benefit people who are not involved in the transaction but have to pay the subsidy. The economy operates most efficiently when things cost what they should or as close as possible.

what Microeconomics is about is calculating what is cost efficient and what is not; free mail services are not; less free mail services are not; rationally priced mail services are.

>The economy operates most efficiently when things cost what they should or as close as possible.

When things cost as close as possible to their MARGINAL cost. The marginal cost of mailing a letter is very low, almost certainly closer to $0 than $0.83, especially if you accept letter carriers have to run their route every day regardless.

The problem of course is the USPS has enormous fixed costs, including I would argue the pensions (honestly not sure how they would be accounted for in a GAAP sense, I'm absolutely not an accountant)

Federal funding has long distinguished between the two for other things like transit. You're only allowed to use federal funds for capital expenses, not operational expenses. USPS getting a taxpayer subsidy for their fixed costs doesn't seem that nuts.

This is how it works in Denmark. A letter costs 23DKK ($3.44) within this small country. A fast letter is 36DKK ($5.39).

I think I've received two letters in the last year. I haven't received any individual junk mail letters.

The letter volume last year was 90M for 6M people, so about 15 each. I assume elderly people and others who have opted out of receiving government and business mail digitally drive that number up.

(Someone still delivers a bundle of leaflets from local businesses all together every month or so, and a local newspaper, but I don't think it's the postal service. Every home gets the same bundle.)

What a.... limited, I guess, viewpoint.

I personally get a massive benefit from USPS being cheap, despite the fact that I send no mail. It provides a massive low-cost physical delivery network across the country, with service to every address. This is a benefit to me because it makes business and personal communication simple and reliable. If I need it personally, it's there. If I don't, I still rely on thousands of parties who do.

Your position is like claiming the interstate system is useless because you don't have a car, ignoring how all those goods your life relies on actually get to you.

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Your comment works great in a vacuum with no other inputs, but it doesn't hold up.

The unintended consequence of this is all the junk mail that makes regular mail a horrible experience to interact with.

Raise the prices , remove the spam.