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I'm not American so I'm probably just used to other systems, but does a public service need to be profitable? Think of it like a "cost centre" in a business, d

I'm not American so I'm probably just used to other systems, but does a public service need to be profitable? Think of it like a "cost centre" in a business, does the utility outweigh the price?

ipython 6y ago
The trouble is that we are subsidizing the shipment of items from China. It’s sickening when I have to pay $5 to send something within the US, yet the same item would cost $.50 from China. You could buy something for $1 from dx.com- shipping included! Crazy. So while I agree with you that we don’t necessarily need a profit motive at the usps, at the same time the taxpayers don’t need to subsidize cheap crap from China.
- Barrin92 6y ago
  I guess the taxpayers are also the people who buy stuff from China so by and large they're just subsidizing themselves? Given how ubiquitous ordering stuff from China is these days I'm not really sure the first impression of this being some good deal is accurate. In fact subsidizing transport to a degree might probably have a progressive effect because low wage earners are more likely to order cheaper foreign goods.
  - lenkite 6y ago
    There were a truckload of articles on this published over the last several years, even during the Obama administration, on how this "international China shipping" being cheaper than "domestic shipping" destroyed small businesses and was also responsible for hundreds (likely thousands) of American deaths thanks to cheap fentayl shipments. This was the most nonsensical self-destructive American policy that strangely never caught much mainstream media attention.
    - xzel 6y ago
      With the potency to weight ratio Fentanyl has, do you really think the shipping being slightly more expensive will make it cost prohibitive? "A kilogram of heroin is purchased for approximately $6,000 and sold for appropriately $80,000." [1] Paying a few more dollars for shipping, which would be the case, doesn't make a dent in profitability. 1. https://www.affirmhealth.com/blog/word-on-the-street-fentanyl https://www.affirmhealth.com/blog/word-on-the-street-fentany...
      - lenkite 6y ago
        I am truly disappointed at the downvotes and the complete lack of research done by down-voters. The answer to your question is "Yes" not because of cost prohibition - but because most fentayl imports are less than 700 grams - which get lost in the massive flood of UPS e-Packet shipments and thus near impossible to inspect. I beg you to carry out your own research before expressing such disbelief. Please read this briefing by the US trade commission https://www.usitc.gov/publications/332/executive_briefings/ebot_george_serletis_fentanyl_from_china_pdf.pdf https://www.usitc.gov/publications/332/executive_briefings/e... "The illicit trade follows the standard e-commerce model of small-scale shipments and B2C and B2B distribution channels. The trade is SME-focused, with small-scale Chinese suppliers primarily exporting to individuals and small independent U.S. criminal networks.China was the source of 97 percent of inbound shipments of high-purity fentanyl during 2016 and 2017" "Given the high purity of Chinese fentanyl, most illicit imports are less than 700 grams (1.5 lbs.) per shipment. "
        thaumasiotes 6y ago
        > I am truly disappointed at at the downvotes and the complete lack of research done by down-voters. The answer to your question is "Yes" not because of cost prohibition - but because most fentayl imports are less than 700 grams - which get lost in the massive flood of UPS e-Packet shipments and thus near impossible to inspect. So what? 100 grams would be bought, by the numbers above, for $600 and sold for $8,000. If shipping cost $200, no one would care. That would add $2,000 in shipping costs to the full kilogram, but, again, no one would care. It's just not significant. Do you have an argument to advance that isn't ludicrous on its face?
  - arcticfox 6y ago
    I think the point is that part of the reason the goods are cheaper foreign is because they can't be made here at all, when shipping is 5x more expensive than importing from China.
    - Barrin92 6y ago
      according to statista[1], the average weight of cross-border packages is about 1 lbs or so, so according to that table shipping from China would be about 1$ cheaper. As the article itself states "You can see from the above anything under 4 ounces is actually cheaper to ship from China. From 4 ounces to 8 ounces the rates are pretty comparable. Once you start hitting about 2 lbs, the prices from shipping within the U.S. start to get comparatively cheaper and cheaper than shipping from within China." I seriously doubt this was ever an existential in the sense of the shipping cost itself destroying a business. China is simply able to produce cheaper things because they have lower labour cost and so on, and that is actually good for American consumers. It's simply free trade. If anything I see a much bigger threat in the ability of the US to raise the prices, because given the current administration it may be used as a protectionist tool. [1]https://www.statista.com/statistics/974065/cross-border-delivery-package-weight-worldwide/ https://www.statista.com/statistics/974065/cross-border-deli...
      - queuep 6y ago
        > It's simply free trade. How can it possibly be free trade if one side is subsidized and one side is not. This is a good thing, I hope same thing will happen in Europe, if it haven't already. The law/agreement in europe is to help people send hand written letters across the globe, and to help people from poor regions send letters ro the more developed regions on earth. This was the case back then, now, the same agreement is used so that you can send stuff worldwide without any fee. That is NOT free trade. https://www.svenskhandel.se/contentassets/5db334c2740b4b7ebec178fb96f94b8e/nordic-commerce-sector-submission-regarding-distortion-of-competition-from-3rd-country-online-platforms-and-terminal-dues-002.pdf https://www.svenskhandel.se/contentassets/5db334c2740b4b7ebe...
        6y ago
  - pochamago 6y ago
    It's basically a reverse tarriff, placing a market barrier on your own industries for no good reason.
  - roenxi 6y ago
    If people had to make an explicit choice between ($1 shipping cost and $2 taxes) vs ($2 shipping cost and $0 taxes) they'd choose the unsubsidised option. "they're just subsidizing themselves" -> they are spending money that they wouldn't choose to spend if they had fine grained control over the taxes they paid.
    - Broken_Hippo 6y ago
      For lots of things, though, that really isn't the clear cut choice. You pay health insurance so you don't have to pay the full cost later on. And it could easily be that the shipping cost + taxes generally means that the system stays afloat. And besides, if you tax correctly, it wouldn't be the same rate for everyone (income taxes should be higher for those making more, for example) nor would it be more than the flat shipping costs so long as the tax money actually went to the postal service. In both cases, are the employees getting paid fair wages? Does the tax mean I'm not getting charged for receiving packages? Are there hidden costs to the lower amount?
      - AnthonyMouse 6y ago
        > You pay health insurance so you don't have to pay the full cost later on. When you buy health insurance you pay more than the expected value of the full cost, both as a result of the cost of providing the insurance and the over-consumption as a result of insurance making patients price insensitive. The reason you buy insurance is in case your medical bills are more than average and you can't afford them. For the average person the insurance is a net loss but the cost savings of not having it aren't worth the risk. > And it could easily be that the shipping cost + taxes generally means that the system stays afloat. If the system is worth more than it costs then it will be able to charge prices that allow it to stay afloat. We generally don't need systems that cost more than they're worth. > And besides, if you tax correctly, it wouldn't be the same rate for everyone (income taxes should be higher for those making more, for example) nor would it be more than the flat shipping costs so long as the tax money actually went to the postal service. Everybody always wants somebody else to pay for it. But it's the people in the middle and not at the top who actually pay for stuff, because they're the only ones numerous enough to do it. > In both cases, are the employees getting paid fair wages? That sounds like a question for the employees and not the customers. Naturally if they're getting paid below market rates they should consider seeking other employment. > Does the tax mean I'm not getting charged for receiving packages? You can already get charged for receiving packages. It's called COD. Nobody really uses it because it's much more convenient to charge up front than have the carrier try to collect payment from the recipient.
  - unishark 6y ago
    Both the seller and the buyer benefits from the subsidy, while only the taxpayer pays for it. So the net benefit is to the chinese seller and net loss is to the taxpayers, which only partly mitigated if they are buyers too.
    - dx034 6y ago
      The environment suffers though. Shipping it in bulk to the US and from there to the customer is more efficient and allows for returns to be reused, creating less waste.
      - megous 6y ago
        I don't think individual Chinese are rafting your goods individually over the pond.
    - drdec 6y ago
      FYI, the US Post Office is an independent agency with its own budget. It does not receive taxpayer money. So really what was happening is that other people or companies sending mail or packages were subsidizing overseas mail and packages.
      - asciident 6y ago
        I would make the case that they do receive taxpayer money. They have a legal right and monopoly to show ads in your mailbox. Without that, they would not exist. Imagine if Facebook were legally allowed to drive by your house and play recordings of ads over a loudspeaker every morning. Facebook would pay the government for that privilege. The government is selling your attention daily (worth billions, if anyone company were to have the ability to charge for it the same way), and giving it to the post office for free.
  - mcv 6y ago
    If you want cheaper products with lower shipment costs, why not subsidise them locally? Why pay to make buying abroad cheaper while making your local products more expensive?
    - megous 6y ago
      If you're creative, you can have free local shipping too, or just pay $2-4 to get shipped pretty much anything. It's just sligtly more expensive than standard aliexpress shipping, which is $1.5 or so. The major thing compared to local stuff is lack of VAT on cheap foregin goods. Noone locally can compete with that. Also most of the stuff I buy on Aliexpress (electronic components, SBCs, ...) simply isn't available locally, or is simply bought there and resold locally (because the manufacturer's main shop is Aliexpress).
- econcon 6y ago
  >The trouble is that we are subsidizing the shipment of items from China. I don't see any problem if taxpayer is the one is paying cheaper price as the end result. It's not like Chinese are charging full rate and sending for dirt cheap and booking mega profits like that. And if a student can order cheaper pen and paper from china or a mechanic can order cheaper nut bolts and screwdriver from china, what's the harm?
  - lenkite 6y ago
    There is definitely a problem with subsidising the destruction of US small-scale businesses while favouring Chinese businesses and subsidising death of American citizens via fentayl. https://www.quora.com/Does-China-ePacket-hurt-American-business https://www.quora.com/Does-China-ePacket-hurt-American-busin... "COMBATTING THE OPIOID CRISIS: EXPLOITING VULNERABILITIES IN INTERNATIONAL MAIL" https://www.hsgac.senate.gov/imo/media/doc/Combatting%20the%20Opioid%20Crisis%20-%20Exploiting%20Vulnerabilities%20in%20International%20Mail1.pdf https://www.hsgac.senate.gov/imo/media/doc/Combatting%20the%... US Senate Staff Report: "Fentanyl Flows from China" https://www.uscc.gov/sites/default/files/Research/Fentanyl%20Flows%20from%20China.pdf https://www.uscc.gov/sites/default/files/Research/Fentanyl%2...
    - markdown 6y ago
      > subsidising death of American citizens via fentayl. LOL, do you really think people buy chinese fentanyl 'cos the shipping per gram is a few cents cheaper than it would be if they had to pay higher shipping rents?
      - lenkite 6y ago
        I made a terrible mistake by my short, snarky answers without citations because I mistakenly assumed that most people were already aware of this. But it seems that I was utterly wrong. (also I did not downvote you) Please read this report by the US trade commission. I can quote further citations if needed, but this one is a succinct briefing. https://www.usitc.gov/publications/332/executive_briefings/ebot_george_serletis_fentanyl_from_china_pdf.pdf https://www.usitc.gov/publications/332/executive_briefings/e... Please also read the United States Senate Sub-committee on Investigations Staff Report. https://www.hsgac.senate.gov/imo/media/doc/Combatting%20the%20Opioid%20Crisis%20-%20Exploiting%20Vulnerabilities%20in%20International%20Mail1.pdf https://www.hsgac.senate.gov/imo/media/doc/Combatting%20the%... "The preferred method of the international online (fentayl) sellers is Express Mail Service (“EMS”), a global delivery service for documents and merchandise contained in letters and package." Further reading in that report will show you how difficult it was to scan/inspect e-packet shipments due to immense volume.
- asveikau 6y ago
  But it's the mail. It simply arrives. If I am in some other country, I pay postage in that country, then that country gives it to USPS and says "your turn now". Are they going to send it back? Surely there can be negotiations between the two countries about how to split that cost paid overseas, but at the end of the day the mail comes in, what are we going to do, not deliver? If domestic mail is too expensive maybe let's address that.
  - 411111111111111 6y ago
    Accept it in harbor, send a new notification that it can be fetched after paying a processing fee (which includes the price of three previous notification). It's not like that isn't already done all over the place. It's not like that would happen often. They'd quickly adapt and start charging more for sending, making it a non-issue most of the time
- ddingus 6y ago
  The Post Office works off Postage, not Tax dollars. Congress is responsible for the rates. Politics and likely donor interests are why the rates are this way.
  - kazagistar 6y ago
    The rates are set because Republicans want to have the postal service die and be fully privatized, and thus make regulstions to sabatoge it on a regular basis.
- pishpash 6y ago
  If you achieved the same level of bulk processing it may not be $0.50, but it wouldn't be $5 either.
- m000 6y ago
  > It’s sickening when I have to pay $5 to send something within the US, yet the same item would cost $.50 from China. What's sickening about this? It's different quality of service. Your $5 package will be received in a few days. With $.50 shipping, your Chinese trinket will be delivered in a couple of months. > So while I agree with you that we don’t necessarily need a profit motive at the usps, at the same time the taxpayers don’t need to subsidize cheap crap from China. Too late for that. China is world's manufactory. Your stuff will be shipped from China one way or another. Given that, subsidising direct shipping from China is the reasonable thing to do. Otherwise you will be paying a 5-10x markup to middlemen for the exact same item.
  - oh_sigh 6y ago
    All the slow Chinese mail gets put on a boat, and taken to say a port in LA where it is offloaded and then inserted into the US mail system. If I bring a package to that same spot in LA where the packages enter the system, why can't I choose a shipping option that costs something less than 50 cents to anywhere in the US? The system was illogical. Whether you want to say that US shipping is too expensive, or Chinese shipping to the US too inexpensive is unimportant.
    - m000 6y ago
      > why can't I choose a shipping option that costs something less than 50 cents to anywhere in the US? Not an American, but I believe there's a 2006 bill that prevents USPS from selling services below the cost. Learned about it in a John Oliver's video [1], mentioned somewhere else in this thread. I'd guess that Chinese epackets are part of an international agreement, so they are exempt. > The system was illogical. It would be illogical if USPS had flexible costs. But the USPS costs are more or less fixed. The mailman will go his round every day and will get his salary, even if he has little to deliver. So, you may as well have him deliver Chinese epackets, for whatever price the Chinese are willing to pay. And that's a good deal for the public. Otherwise the $1 trinket for China would be $6 (if Chinese had to pay full shipping), or $10 (if bought through a US-based reseller). [1] https://www.youtube.com/watch?v=IoL8g0W9gAQ https://www.youtube.com/watch?v=IoL8g0W9gAQ
    - 6y ago
- tedmcory77 6y ago
  Not only that, but it creates an anti competitive environment where someone like me, who sells to US customers, subsidizes those shipments from other countries. That's the real kicker in this whole thing.
Klinky 6y ago
USPS is self funded, so it's important to at least not lose money.
- dimitrios1 6y ago
  The USPS loses billions every year.
  - mijkal 6y ago
    It's an artificial deficit that Congress created. The postal service is one of the few gov't agencies explicitly created in the Constitution; it's vital to national cohesion and commerce (especially rural areas).
    - culturestate 6y ago
      You're right that the deficit is mostly artificial, but since this has come up a lot recently it's important to point out that the USPS as an entity is not enshrined in the constitution. The postal clause says: > The Congress shall have Power...To establish Post Offices and post Roads And that's it. The rest is left up to Congress to figure out; they could, if they chose, punt entirely and allow eg FedEx to run post offices. I think the USPS is vitally important, and we can make arguments for its role as a public good without being hyperbolic about it.
    - magila 6y ago
      In FY 2019 the USPS lost $3.4 billion excluding all Congressionally mandated expenditures[1]. In 2018 they lost almost $2 billion, also excluding mandatory expenditures. The USPS's precarious financial situation is not artificial, it's the result of a long term decline in mail volume as correspondence increasingly shifts to electronic systems. A nit: The postal service wasn't actually created in the Constitution. Congress is merely authorized to do so. [1] https://about.usps.com/what/financials/10k-reports/fy2019.pdf https://about.usps.com/what/financials/10k-reports/fy2019.pd... Page 18, labeled "Controllable loss".
      - 6y ago
neom 6y ago
Stephen Colbert did a surprisingly interesting segment on USPS and this very question last month: https://www.youtube.com/watch?v=IoL8g0W9gAQ https://www.youtube.com/watch?v=IoL8g0W9gAQ
- ShamelessC 6y ago
  That's John Oliver.
  - oth001 6y ago
    Same thing
  - bzb3 6y ago
    I can't tell one liberal talking head from the other.
  - neom 6y ago
    Wow I'm an idiot. *John Oliver
Marsymars 6y ago
It doesn't need to be profitable, but I'd question the idea that the postal service, in particular, should be subsidized. Even without being subsidized, it has negative externalities that likely aren't being appropriately priced.
- repsilat 6y ago
  Subsidies to bootstrap into economies of scale can make sense. When you go from filling 0.1 jets or 0.1 containers or 0.1 ships to filling 10.1 jets etc, the costs come down and usage (and utility) go up. See Amazon, and I guess Uber if they ever make it work. Shipping from China is well past that point, though, it's clearly providing perverse incentives and it's good that it's changing.
- ltbarcly3 6y ago
  In a world where the mail is the only reliable of communication with the rest of the country, subsidizing the mail was important to improve basic quality of life in more remote, and more poor, parts of the country. This survives to this day in 'media mail' rates, which are heavily subsidized to allow things like books and periodicals to reach rural people. However, in a world where basically 100% of the business of the postal service is junk advertising and amazon packages, subsidizing it is just a payout to business, and I agree that the externalities now greatly outweigh any social benefit.
cameldrv 6y ago
It costs significantly less to send a lightweight package, via the USPS, from China to the U.S. than it does to send it within the U.S. There's no reason American taxpayers and postal rate payers should be subsidizing shipping costs for Chinese Ebay/Amazon merchants at the expense of their American competitors.
- lazylizard 6y ago
  American taxpayers are ok with subsidizing themselves buying cheap stuff from aliexpress pinduoduo and taobao maybe?
  - cameldrv 6y ago
    No they're not. The reason it's so cheap is that the UPU forced the U.S. to offer these rates. As a result, the U.S. threatened to leave the UPU so that the USPS could adjust the rates to be more equitable.
    - mcv 6y ago
      Once upon a time, the US agreed to these rates, because at the time they were reasonable. The idea was that developing countries would be held back if they had to pay the full cost of international mail. To help them, the relatively low volume of mail from developing countries would be subsidised a bit by the country it was mailed to. But China isn't a developing country anymore; it's the #2 economy of the world. And the volume isn't small either. The rule should not apply to them, but it's hard to change.
faizshah 6y ago
Practically they don’t need to be profitable since we print our own currency. As Prof. Stephanie Kelton puts it “the governments red ink is our black ink.” But politically when US politicians want to attack a popular service, they use analogies to home economics to manufacture a crisis. Worth noting also that the USPS in particular has been politically sabotaged (and they explain how to fix it): https://ips-dc.org/how-congress-manufactured-a-postal-crisis-and-how-to-fix-it/ https://ips-dc.org/how-congress-manufactured-a-postal-crisis...
- jhoechtl 6y ago
  That does sound all economically right to me, why the downvotes?
  - faizshah 6y ago
    Understandable, it’s a somewhat new way of thinking called “Modern Monetary Theory.” See Kelton’s “The Deficit Myth” for more info. Many interesting threads in the last year on this: https://www.google.com/search?q=modern+monetary+theory+site%3Anews.ycombinator.com https://www.google.com/search?q=modern+monetary+theory+site%...
  - derriz 6y ago
    Because she's one of the biggest proponents of Modern Monetary Theory and most economists view it as snake-oil. MMT claims to offers a fix/cure all our economic problems - everyone can have limitless money to spend as long as "sovereign" governments are the ones handing out the free money. And like snake-oil theories it collapses under the mildest of empirical tests. I could go on, I guess (random google) an article like this sums it up for me: https://www.singlelunch.com/2018/10/01/bad-economics-shame-on-you-planet-money-mmt-episode/ https://www.singlelunch.com/2018/10/01/bad-economics-shame-o...
    - makomk 6y ago
      More specifically, it draws a bogus conclusion from a true premise using an assumption that wouldn't be true anymore if their policies were enacted. The government can indeed print money and government debt is private savings - what it can't do is print resources. The USPS uses a whole bunch of sorting offices and equipment and vans and people's time which cannot just be magicked out of nowhere by the government. They all consume scarce resources that can't be used for anything else. The same is true of the USPS staff's healthcare and retirement - again, a whole bunch of resources. We're used to the fact that money represents a claim on real things at a rate that only slowly declines due to inflation because government fiscal policy is carefully managed to ensure that by not printing too much or too little money.
jariel 6y ago
Possibly, but this 'we will deliver other people's mail for free' is a concept that predates e-commerce as we understand it by 100 years. Shipping is a major part of the equation so it's screwing up commerce. They should dump the agreement for all but regular letter mail, it makes no sense otherwise. It's rational if the price of shipping is more transparent and consistent with the actual, underlying cost. For example, if this system did not exist, and China was subsidising their own shipping to the US, ironically, it would be illegal under WTO rules! It's absurd and it should have ended long ago. I still cannot believe that US companies have not been able to lobby to have this cut two decades ago.
Rebelgecko 6y ago
Its slightly ridiculous that a company in the same city as me has to pay more to mail me a package than a company in China. Especially if the difference in shipping costs is subsidized by American taxpayers. I'm not crazy about tariffs, but I'm even less crazy about the idea of the USPS giving foreign companies such a huge advantage over domestic ones
- derriz 6y ago
  Why is ridiculous or even remarkable? Pretty much every 3rd party service that an American-based company uses costs significantly more than an equivalent in China. And most of these costs are far more significant than the cost of postage (e.g. wages and salaries, rents, etc.) unless you're involved in a very low value-add business.
  - Rebelgecko 6y ago
    I find it ridiculous because it's not a comparison between the USPS and a similar service in China. Both companies are getting the same service in America, but the foreign companies get it much more cheaply. To the point that shipping something from China to the US, then from the US to me is cheaper than an American company shipping something directly to me. I'm guilty of buying plenty of $1-$2 dollar knicknacks with free epacket shipping on AliExpress. An American company can't even compete, because shipping alone is going to cost them more than the $1-$2 I paid for the Chinese item
    - TMWNN 6y ago
      >Both companies are getting the same service in America, but the foreign companies get it much more cheaply. The fact that you have to explicitly point this out to derriz ...
- econcon 6y ago
  It's also true in china. When I used to live in china, for same day delivery in Shanghai I had to book a cab for $40
ethanwillis 6y ago
I think the American conception here is that if something is not profitable then it suggests the possibility that there is an alternative that provides the same utility but more efficiently.
- ltbarcly3 6y ago
  I think the conception here is that if you are subsidizing something in a way that is purely a wealth transfer to business, you should stop subsidizing it.
  - ethanwillis 6y ago
    So my original comment was really just offering up the mindset behind why Americans are averse to services "costing" money. While I think your comment may have been imbuing a value judgement on my original comment where I wasn't making any.. it does bring up a good point. Obviously this mindset doesn't hold true across the board for all services. The one that immediately comes to mind is farming. I think more people are averse to the idea of farmers/farming operations going bankrupt. I think most people would be fine with a pure wealth transfer to that industry to help it get through a massive downturn. But why does that industry get a general pass? My guess is that food production is perceived as more of a core need than mail/package delivery. Even when mail/package delivery is an important part of a modern economy.
ddingus 6y ago
The Post Office is funded by those that use it, not Tax Dollars. The poor rate structure and widely publicized losses are due to artificial and quite excessive benefit pre pay mandates going out decades and a rate structure mandated by Congress for political reasons. These changes were made during the Bush Administration.
- missedthecue 6y ago
  1. The 2006 Postal Accountability and Enhancement Act (PAEA) had bipartisan support and was sponsored by two Democrats. It was not a Bush conspiracy. 2. It included a 10 year prepayment period. This ended in 2016. It is 2020. Current USPS financial woes have nothing to do with that act. We are now in the follow-on period in which the USPS is intended to be amortizing its remaining unfunded liability over 40 years, to 2056. And this 40 year amortization period is exactly the same length of time as private-sector employers are given. 3. The USPS gets ~$18 billion in taxpayer funding/subsidies annually. https://fortune.com/2015/03/27/us-postal-service/ https://fortune.com/2015/03/27/us-postal-service/
  - ddingus 6y ago
    Note: I made no mention of conspiracy, nor it being partisan. Fact is both parties receive significant financial incentives aimed at privatizing the Post Office. There is no benefit to the American people down that path. That analysis is incomplete and inaccurate. 3 is particularly egregious. Compute it prior to the act, and the arguments evaporate. Another fact: That bill was, and remains unnecessary, and is intended to undermine an otherwise exemplary service. I won't respond to this again.
dragonwriter 6y ago
> I'm not American so I'm probably just used to other systems, but does a public service need to be profitable? A public service doesn't but the USPS is effectively run as a highly (and hostilely) regulated private monopoly, rather than a public service.
- deleted 6y ago
  [deleted]
mcv 6y ago
In my opinion a public service doesn't need to be profitable at all, as long as it provides benefits in more important areas. I'm all for free education and free public transport and all that. But in this case, the US (and EU) are subsidizing products that compete with local products, undercutting local products in price, in quality, and often not complying with safety standards, while also avoiding customs and sales taxes because the individual packages are too small to meet the limit. You're basically supporting unfair competition, and paying to undermine your own quality standards and taxes. There's no benefit at all to the country that's paying for this.
colechristensen 6y ago
If you remove the need for external funding, you also remove the political baggage that comes along with it. Cost centers in businesses are bad to be in because there is always someone around trying to squeeze you instead of support you. And unlike police who, when trying to be profitable are driven by perverse incentives to be corrupt, the post office doing more business is hard to see as a bad thing. Also as many others have mentioned, the Chinese shipping rates were much lower than domestic rates, to the level that cheap products made in the US couldn’t be given away for free cheaper than things could be imported from china. $0 + shipping cost more than similar products sold at a profit and shipped from China.
addicted 6y ago
There’s no reason for USPS to make a loss on this either. I can absolutely see a situation where products being shipped from China are given cheaper rates than products shipped domestically. In fact, I expect that’s how it should be. Simply because for products from China, USPS would be tying up with the Chinese postal service, and due to the massive volumes they have, they would be able to offer extremely low rates that they couldn’t offer anyone in the US besides Amazon and Walmart maybe. However, those rates should be profitable rates for USPS.
netcan 6y ago
No. I don't think this is about that though. This isn't about a policy that costs money, and creates benefits. It's not even really a policy. It's a side effect of quasi-diplomatic arrangements created decades ago... with no relationship between original goals and current outcomes. Maybe it makes sense to subsidize a national package delivery. IF so, they can make a policy that does this, but this one isn't it.
tehjoker 6y ago
No it does not. An easy example to see is public medicine that treats poor people. You can't squeeze blood from a stone, but a healthy population is overall happier and able to do things. However, it doesn't make money directly for anyone. Since the 1970s, the popular ideology of the ruling class is that government has to work like a buisness, and is a facet of "neoliberalism" -- the idea that markets are the best tool for every situation despite the numerous problems with them. In the US, the idea is to disdain public services unless they can be used to socialize a cost of doing business. The USPS has been allowed to function because it made shipping cheaper, which is the lifeblood of business. However, other political calculations are coming to the fore (such as international competition) so they are thinking of kneecapping cheap rates to China.

I'm not American so I'm probably just used to other systems, but does a public service need to be profitable? Think of it like a "cost centre" in a business, does the utility outweigh the price?

ipython 6y ago

The trouble is that we are subsidizing the shipment of items from China. It’s sickening when I have to pay $5 to send something within the US, yet the same item would cost $.50 from China. You could buy something for $1 from dx.com- shipping included! Crazy. So while I agree with you that we don’t necessarily need a profit motive at the usps, at the same time the taxpayers don’t need to subsidize cheap crap from China.

Barrin92 6y ago
I guess the taxpayers are also the people who buy stuff from China so by and large they're just subsidizing themselves? Given how ubiquitous ordering stuff from China is these days I'm not really sure the first impression of this being some good deal is accurate. In fact subsidizing transport to a degree might probably have a progressive effect because low wage earners are more likely to order cheaper foreign goods.
- lenkite 6y ago
  There were a truckload of articles on this published over the last several years, even during the Obama administration, on how this "international China shipping" being cheaper than "domestic shipping" destroyed small businesses and was also responsible for hundreds (likely thousands) of American deaths thanks to cheap fentayl shipments. This was the most nonsensical self-destructive American policy that strangely never caught much mainstream media attention.
  - xzel 6y ago
    With the potency to weight ratio Fentanyl has, do you really think the shipping being slightly more expensive will make it cost prohibitive? "A kilogram of heroin is purchased for approximately $6,000 and sold for appropriately $80,000." [1] Paying a few more dollars for shipping, which would be the case, doesn't make a dent in profitability. 1. https://www.affirmhealth.com/blog/word-on-the-street-fentanyl https://www.affirmhealth.com/blog/word-on-the-street-fentany...
    - lenkite 6y ago
      I am truly disappointed at the downvotes and the complete lack of research done by down-voters. The answer to your question is "Yes" not because of cost prohibition - but because most fentayl imports are less than 700 grams - which get lost in the massive flood of UPS e-Packet shipments and thus near impossible to inspect. I beg you to carry out your own research before expressing such disbelief. Please read this briefing by the US trade commission https://www.usitc.gov/publications/332/executive_briefings/ebot_george_serletis_fentanyl_from_china_pdf.pdf https://www.usitc.gov/publications/332/executive_briefings/e... "The illicit trade follows the standard e-commerce model of small-scale shipments and B2C and B2B distribution channels. The trade is SME-focused, with small-scale Chinese suppliers primarily exporting to individuals and small independent U.S. criminal networks.China was the source of 97 percent of inbound shipments of high-purity fentanyl during 2016 and 2017" "Given the high purity of Chinese fentanyl, most illicit imports are less than 700 grams (1.5 lbs.) per shipment. "
      - thaumasiotes 6y ago
        > I am truly disappointed at at the downvotes and the complete lack of research done by down-voters. The answer to your question is "Yes" not because of cost prohibition - but because most fentayl imports are less than 700 grams - which get lost in the massive flood of UPS e-Packet shipments and thus near impossible to inspect. So what? 100 grams would be bought, by the numbers above, for $600 and sold for $8,000. If shipping cost $200, no one would care. That would add $2,000 in shipping costs to the full kilogram, but, again, no one would care. It's just not significant. Do you have an argument to advance that isn't ludicrous on its face?
- arcticfox 6y ago
  I think the point is that part of the reason the goods are cheaper foreign is because they can't be made here at all, when shipping is 5x more expensive than importing from China.
  - Barrin92 6y ago
    according to statista[1], the average weight of cross-border packages is about 1 lbs or so, so according to that table shipping from China would be about 1$ cheaper. As the article itself states "You can see from the above anything under 4 ounces is actually cheaper to ship from China. From 4 ounces to 8 ounces the rates are pretty comparable. Once you start hitting about 2 lbs, the prices from shipping within the U.S. start to get comparatively cheaper and cheaper than shipping from within China." I seriously doubt this was ever an existential in the sense of the shipping cost itself destroying a business. China is simply able to produce cheaper things because they have lower labour cost and so on, and that is actually good for American consumers. It's simply free trade. If anything I see a much bigger threat in the ability of the US to raise the prices, because given the current administration it may be used as a protectionist tool. [1]https://www.statista.com/statistics/974065/cross-border-delivery-package-weight-worldwide/ https://www.statista.com/statistics/974065/cross-border-deli...
    - queuep 6y ago
      > It's simply free trade. How can it possibly be free trade if one side is subsidized and one side is not. This is a good thing, I hope same thing will happen in Europe, if it haven't already. The law/agreement in europe is to help people send hand written letters across the globe, and to help people from poor regions send letters ro the more developed regions on earth. This was the case back then, now, the same agreement is used so that you can send stuff worldwide without any fee. That is NOT free trade. https://www.svenskhandel.se/contentassets/5db334c2740b4b7ebec178fb96f94b8e/nordic-commerce-sector-submission-regarding-distortion-of-competition-from-3rd-country-online-platforms-and-terminal-dues-002.pdf https://www.svenskhandel.se/contentassets/5db334c2740b4b7ebe...
      - 6y ago
- pochamago 6y ago
  It's basically a reverse tarriff, placing a market barrier on your own industries for no good reason.
- roenxi 6y ago
  If people had to make an explicit choice between ($1 shipping cost and $2 taxes) vs ($2 shipping cost and $0 taxes) they'd choose the unsubsidised option. "they're just subsidizing themselves" -> they are spending money that they wouldn't choose to spend if they had fine grained control over the taxes they paid.
  - Broken_Hippo 6y ago
    For lots of things, though, that really isn't the clear cut choice. You pay health insurance so you don't have to pay the full cost later on. And it could easily be that the shipping cost + taxes generally means that the system stays afloat. And besides, if you tax correctly, it wouldn't be the same rate for everyone (income taxes should be higher for those making more, for example) nor would it be more than the flat shipping costs so long as the tax money actually went to the postal service. In both cases, are the employees getting paid fair wages? Does the tax mean I'm not getting charged for receiving packages? Are there hidden costs to the lower amount?
    - AnthonyMouse 6y ago
      > You pay health insurance so you don't have to pay the full cost later on. When you buy health insurance you pay more than the expected value of the full cost, both as a result of the cost of providing the insurance and the over-consumption as a result of insurance making patients price insensitive. The reason you buy insurance is in case your medical bills are more than average and you can't afford them. For the average person the insurance is a net loss but the cost savings of not having it aren't worth the risk. > And it could easily be that the shipping cost + taxes generally means that the system stays afloat. If the system is worth more than it costs then it will be able to charge prices that allow it to stay afloat. We generally don't need systems that cost more than they're worth. > And besides, if you tax correctly, it wouldn't be the same rate for everyone (income taxes should be higher for those making more, for example) nor would it be more than the flat shipping costs so long as the tax money actually went to the postal service. Everybody always wants somebody else to pay for it. But it's the people in the middle and not at the top who actually pay for stuff, because they're the only ones numerous enough to do it. > In both cases, are the employees getting paid fair wages? That sounds like a question for the employees and not the customers. Naturally if they're getting paid below market rates they should consider seeking other employment. > Does the tax mean I'm not getting charged for receiving packages? You can already get charged for receiving packages. It's called COD. Nobody really uses it because it's much more convenient to charge up front than have the carrier try to collect payment from the recipient.
- unishark 6y ago
  Both the seller and the buyer benefits from the subsidy, while only the taxpayer pays for it. So the net benefit is to the chinese seller and net loss is to the taxpayers, which only partly mitigated if they are buyers too.
  - dx034 6y ago
    The environment suffers though. Shipping it in bulk to the US and from there to the customer is more efficient and allows for returns to be reused, creating less waste.
    - megous 6y ago
      I don't think individual Chinese are rafting your goods individually over the pond.
  - drdec 6y ago
    FYI, the US Post Office is an independent agency with its own budget. It does not receive taxpayer money. So really what was happening is that other people or companies sending mail or packages were subsidizing overseas mail and packages.
    - asciident 6y ago
      I would make the case that they do receive taxpayer money. They have a legal right and monopoly to show ads in your mailbox. Without that, they would not exist. Imagine if Facebook were legally allowed to drive by your house and play recordings of ads over a loudspeaker every morning. Facebook would pay the government for that privilege. The government is selling your attention daily (worth billions, if anyone company were to have the ability to charge for it the same way), and giving it to the post office for free.
- mcv 6y ago
  If you want cheaper products with lower shipment costs, why not subsidise them locally? Why pay to make buying abroad cheaper while making your local products more expensive?
  - megous 6y ago
    If you're creative, you can have free local shipping too, or just pay $2-4 to get shipped pretty much anything. It's just sligtly more expensive than standard aliexpress shipping, which is $1.5 or so. The major thing compared to local stuff is lack of VAT on cheap foregin goods. Noone locally can compete with that. Also most of the stuff I buy on Aliexpress (electronic components, SBCs, ...) simply isn't available locally, or is simply bought there and resold locally (because the manufacturer's main shop is Aliexpress).
econcon 6y ago
>The trouble is that we are subsidizing the shipment of items from China. I don't see any problem if taxpayer is the one is paying cheaper price as the end result. It's not like Chinese are charging full rate and sending for dirt cheap and booking mega profits like that. And if a student can order cheaper pen and paper from china or a mechanic can order cheaper nut bolts and screwdriver from china, what's the harm?
- lenkite 6y ago
  There is definitely a problem with subsidising the destruction of US small-scale businesses while favouring Chinese businesses and subsidising death of American citizens via fentayl. https://www.quora.com/Does-China-ePacket-hurt-American-business https://www.quora.com/Does-China-ePacket-hurt-American-busin... "COMBATTING THE OPIOID CRISIS: EXPLOITING VULNERABILITIES IN INTERNATIONAL MAIL" https://www.hsgac.senate.gov/imo/media/doc/Combatting%20the%20Opioid%20Crisis%20-%20Exploiting%20Vulnerabilities%20in%20International%20Mail1.pdf https://www.hsgac.senate.gov/imo/media/doc/Combatting%20the%... US Senate Staff Report: "Fentanyl Flows from China" https://www.uscc.gov/sites/default/files/Research/Fentanyl%20Flows%20from%20China.pdf https://www.uscc.gov/sites/default/files/Research/Fentanyl%2...
  - markdown 6y ago
    > subsidising death of American citizens via fentayl. LOL, do you really think people buy chinese fentanyl 'cos the shipping per gram is a few cents cheaper than it would be if they had to pay higher shipping rents?
    - lenkite 6y ago
      I made a terrible mistake by my short, snarky answers without citations because I mistakenly assumed that most people were already aware of this. But it seems that I was utterly wrong. (also I did not downvote you) Please read this report by the US trade commission. I can quote further citations if needed, but this one is a succinct briefing. https://www.usitc.gov/publications/332/executive_briefings/ebot_george_serletis_fentanyl_from_china_pdf.pdf https://www.usitc.gov/publications/332/executive_briefings/e... Please also read the United States Senate Sub-committee on Investigations Staff Report. https://www.hsgac.senate.gov/imo/media/doc/Combatting%20the%20Opioid%20Crisis%20-%20Exploiting%20Vulnerabilities%20in%20International%20Mail1.pdf https://www.hsgac.senate.gov/imo/media/doc/Combatting%20the%... "The preferred method of the international online (fentayl) sellers is Express Mail Service (“EMS”), a global delivery service for documents and merchandise contained in letters and package." Further reading in that report will show you how difficult it was to scan/inspect e-packet shipments due to immense volume.
asveikau 6y ago
But it's the mail. It simply arrives. If I am in some other country, I pay postage in that country, then that country gives it to USPS and says "your turn now". Are they going to send it back? Surely there can be negotiations between the two countries about how to split that cost paid overseas, but at the end of the day the mail comes in, what are we going to do, not deliver? If domestic mail is too expensive maybe let's address that.
- 411111111111111 6y ago
  Accept it in harbor, send a new notification that it can be fetched after paying a processing fee (which includes the price of three previous notification). It's not like that isn't already done all over the place. It's not like that would happen often. They'd quickly adapt and start charging more for sending, making it a non-issue most of the time
ddingus 6y ago
The Post Office works off Postage, not Tax dollars. Congress is responsible for the rates. Politics and likely donor interests are why the rates are this way.
- kazagistar 6y ago
  The rates are set because Republicans want to have the postal service die and be fully privatized, and thus make regulstions to sabatoge it on a regular basis.
pishpash 6y ago
If you achieved the same level of bulk processing it may not be $0.50, but it wouldn't be $5 either.
m000 6y ago
> It’s sickening when I have to pay $5 to send something within the US, yet the same item would cost $.50 from China. What's sickening about this? It's different quality of service. Your $5 package will be received in a few days. With $.50 shipping, your Chinese trinket will be delivered in a couple of months. > So while I agree with you that we don’t necessarily need a profit motive at the usps, at the same time the taxpayers don’t need to subsidize cheap crap from China. Too late for that. China is world's manufactory. Your stuff will be shipped from China one way or another. Given that, subsidising direct shipping from China is the reasonable thing to do. Otherwise you will be paying a 5-10x markup to middlemen for the exact same item.
- oh_sigh 6y ago
  All the slow Chinese mail gets put on a boat, and taken to say a port in LA where it is offloaded and then inserted into the US mail system. If I bring a package to that same spot in LA where the packages enter the system, why can't I choose a shipping option that costs something less than 50 cents to anywhere in the US? The system was illogical. Whether you want to say that US shipping is too expensive, or Chinese shipping to the US too inexpensive is unimportant.
  - m000 6y ago
    > why can't I choose a shipping option that costs something less than 50 cents to anywhere in the US? Not an American, but I believe there's a 2006 bill that prevents USPS from selling services below the cost. Learned about it in a John Oliver's video [1], mentioned somewhere else in this thread. I'd guess that Chinese epackets are part of an international agreement, so they are exempt. > The system was illogical. It would be illogical if USPS had flexible costs. But the USPS costs are more or less fixed. The mailman will go his round every day and will get his salary, even if he has little to deliver. So, you may as well have him deliver Chinese epackets, for whatever price the Chinese are willing to pay. And that's a good deal for the public. Otherwise the $1 trinket for China would be $6 (if Chinese had to pay full shipping), or $10 (if bought through a US-based reseller). [1] https://www.youtube.com/watch?v=IoL8g0W9gAQ https://www.youtube.com/watch?v=IoL8g0W9gAQ
  - 6y ago
tedmcory77 6y ago
Not only that, but it creates an anti competitive environment where someone like me, who sells to US customers, subsidizes those shipments from other countries. That's the real kicker in this whole thing.

Klinky 6y ago

USPS is self funded, so it's important to at least not lose money.

dimitrios1 6y ago
The USPS loses billions every year.
- mijkal 6y ago
  It's an artificial deficit that Congress created. The postal service is one of the few gov't agencies explicitly created in the Constitution; it's vital to national cohesion and commerce (especially rural areas).
  - culturestate 6y ago
    You're right that the deficit is mostly artificial, but since this has come up a lot recently it's important to point out that the USPS as an entity is not enshrined in the constitution. The postal clause says: > The Congress shall have Power...To establish Post Offices and post Roads And that's it. The rest is left up to Congress to figure out; they could, if they chose, punt entirely and allow eg FedEx to run post offices. I think the USPS is vitally important, and we can make arguments for its role as a public good without being hyperbolic about it.
  - magila 6y ago
    In FY 2019 the USPS lost $3.4 billion excluding all Congressionally mandated expenditures[1]. In 2018 they lost almost $2 billion, also excluding mandatory expenditures. The USPS's precarious financial situation is not artificial, it's the result of a long term decline in mail volume as correspondence increasingly shifts to electronic systems. A nit: The postal service wasn't actually created in the Constitution. Congress is merely authorized to do so. [1] https://about.usps.com/what/financials/10k-reports/fy2019.pdf https://about.usps.com/what/financials/10k-reports/fy2019.pd... Page 18, labeled "Controllable loss".
    - 6y ago

neom 6y ago

Stephen Colbert did a surprisingly interesting segment on USPS and this very question last month: https://www.youtube.com/watch?v=IoL8g0W9gAQ https://www.youtube.com/watch?v=IoL8g0W9gAQ

ShamelessC 6y ago
That's John Oliver.
- oth001 6y ago
  Same thing
- bzb3 6y ago
  I can't tell one liberal talking head from the other.
- neom 6y ago
  Wow I'm an idiot. *John Oliver

Marsymars 6y ago

It doesn't need to be profitable, but I'd question the idea that the postal service, in particular, should be subsidized. Even without being subsidized, it has negative externalities that likely aren't being appropriately priced.

repsilat 6y ago
Subsidies to bootstrap into economies of scale can make sense. When you go from filling 0.1 jets or 0.1 containers or 0.1 ships to filling 10.1 jets etc, the costs come down and usage (and utility) go up. See Amazon, and I guess Uber if they ever make it work. Shipping from China is well past that point, though, it's clearly providing perverse incentives and it's good that it's changing.
ltbarcly3 6y ago
In a world where the mail is the only reliable of communication with the rest of the country, subsidizing the mail was important to improve basic quality of life in more remote, and more poor, parts of the country. This survives to this day in 'media mail' rates, which are heavily subsidized to allow things like books and periodicals to reach rural people. However, in a world where basically 100% of the business of the postal service is junk advertising and amazon packages, subsidizing it is just a payout to business, and I agree that the externalities now greatly outweigh any social benefit.

cameldrv 6y ago

It costs significantly less to send a lightweight package, via the USPS, from China to the U.S. than it does to send it within the U.S. There's no reason American taxpayers and postal rate payers should be subsidizing shipping costs for Chinese Ebay/Amazon merchants at the expense of their American competitors.

lazylizard 6y ago
American taxpayers are ok with subsidizing themselves buying cheap stuff from aliexpress pinduoduo and taobao maybe?
- cameldrv 6y ago
  No they're not. The reason it's so cheap is that the UPU forced the U.S. to offer these rates. As a result, the U.S. threatened to leave the UPU so that the USPS could adjust the rates to be more equitable.
  - mcv 6y ago
    Once upon a time, the US agreed to these rates, because at the time they were reasonable. The idea was that developing countries would be held back if they had to pay the full cost of international mail. To help them, the relatively low volume of mail from developing countries would be subsidised a bit by the country it was mailed to. But China isn't a developing country anymore; it's the #2 economy of the world. And the volume isn't small either. The rule should not apply to them, but it's hard to change.

faizshah 6y ago

Practically they don’t need to be profitable since we print our own currency. As Prof. Stephanie Kelton puts it “the governments red ink is our black ink.” But politically when US politicians want to attack a popular service, they use analogies to home economics to manufacture a crisis. Worth noting also that the USPS in particular has been politically sabotaged (and they explain how to fix it): https://ips-dc.org/how-congress-manufactured-a-postal-crisis-and-how-to-fix-it/ https://ips-dc.org/how-congress-manufactured-a-postal-crisis...

jhoechtl 6y ago
That does sound all economically right to me, why the downvotes?
- faizshah 6y ago
  Understandable, it’s a somewhat new way of thinking called “Modern Monetary Theory.” See Kelton’s “The Deficit Myth” for more info. Many interesting threads in the last year on this: https://www.google.com/search?q=modern+monetary+theory+site%3Anews.ycombinator.com https://www.google.com/search?q=modern+monetary+theory+site%...
- derriz 6y ago
  Because she's one of the biggest proponents of Modern Monetary Theory and most economists view it as snake-oil. MMT claims to offers a fix/cure all our economic problems - everyone can have limitless money to spend as long as "sovereign" governments are the ones handing out the free money. And like snake-oil theories it collapses under the mildest of empirical tests. I could go on, I guess (random google) an article like this sums it up for me: https://www.singlelunch.com/2018/10/01/bad-economics-shame-on-you-planet-money-mmt-episode/ https://www.singlelunch.com/2018/10/01/bad-economics-shame-o...
  - makomk 6y ago
    More specifically, it draws a bogus conclusion from a true premise using an assumption that wouldn't be true anymore if their policies were enacted. The government can indeed print money and government debt is private savings - what it can't do is print resources. The USPS uses a whole bunch of sorting offices and equipment and vans and people's time which cannot just be magicked out of nowhere by the government. They all consume scarce resources that can't be used for anything else. The same is true of the USPS staff's healthcare and retirement - again, a whole bunch of resources. We're used to the fact that money represents a claim on real things at a rate that only slowly declines due to inflation because government fiscal policy is carefully managed to ensure that by not printing too much or too little money.

jariel 6y ago

Possibly, but this 'we will deliver other people's mail for free' is a concept that predates e-commerce as we understand it by 100 years. Shipping is a major part of the equation so it's screwing up commerce. They should dump the agreement for all but regular letter mail, it makes no sense otherwise. It's rational if the price of shipping is more transparent and consistent with the actual, underlying cost. For example, if this system did not exist, and China was subsidising their own shipping to the US, ironically, it would be illegal under WTO rules! It's absurd and it should have ended long ago. I still cannot believe that US companies have not been able to lobby to have this cut two decades ago.

Rebelgecko 6y ago

Its slightly ridiculous that a company in the same city as me has to pay more to mail me a package than a company in China. Especially if the difference in shipping costs is subsidized by American taxpayers. I'm not crazy about tariffs, but I'm even less crazy about the idea of the USPS giving foreign companies such a huge advantage over domestic ones

derriz 6y ago
Why is ridiculous or even remarkable? Pretty much every 3rd party service that an American-based company uses costs significantly more than an equivalent in China. And most of these costs are far more significant than the cost of postage (e.g. wages and salaries, rents, etc.) unless you're involved in a very low value-add business.
- Rebelgecko 6y ago
  I find it ridiculous because it's not a comparison between the USPS and a similar service in China. Both companies are getting the same service in America, but the foreign companies get it much more cheaply. To the point that shipping something from China to the US, then from the US to me is cheaper than an American company shipping something directly to me. I'm guilty of buying plenty of $1-$2 dollar knicknacks with free epacket shipping on AliExpress. An American company can't even compete, because shipping alone is going to cost them more than the $1-$2 I paid for the Chinese item
  - TMWNN 6y ago
    >Both companies are getting the same service in America, but the foreign companies get it much more cheaply. The fact that you have to explicitly point this out to derriz ...
econcon 6y ago
It's also true in china. When I used to live in china, for same day delivery in Shanghai I had to book a cab for $40

ethanwillis 6y ago

I think the American conception here is that if something is not profitable then it suggests the possibility that there is an alternative that provides the same utility but more efficiently.

ltbarcly3 6y ago
I think the conception here is that if you are subsidizing something in a way that is purely a wealth transfer to business, you should stop subsidizing it.
- ethanwillis 6y ago
  So my original comment was really just offering up the mindset behind why Americans are averse to services "costing" money. While I think your comment may have been imbuing a value judgement on my original comment where I wasn't making any.. it does bring up a good point. Obviously this mindset doesn't hold true across the board for all services. The one that immediately comes to mind is farming. I think more people are averse to the idea of farmers/farming operations going bankrupt. I think most people would be fine with a pure wealth transfer to that industry to help it get through a massive downturn. But why does that industry get a general pass? My guess is that food production is perceived as more of a core need than mail/package delivery. Even when mail/package delivery is an important part of a modern economy.

ddingus 6y ago

The Post Office is funded by those that use it, not Tax Dollars. The poor rate structure and widely publicized losses are due to artificial and quite excessive benefit pre pay mandates going out decades and a rate structure mandated by Congress for political reasons. These changes were made during the Bush Administration.

missedthecue 6y ago
1. The 2006 Postal Accountability and Enhancement Act (PAEA) had bipartisan support and was sponsored by two Democrats. It was not a Bush conspiracy. 2. It included a 10 year prepayment period. This ended in 2016. It is 2020. Current USPS financial woes have nothing to do with that act. We are now in the follow-on period in which the USPS is intended to be amortizing its remaining unfunded liability over 40 years, to 2056. And this 40 year amortization period is exactly the same length of time as private-sector employers are given. 3. The USPS gets ~$18 billion in taxpayer funding/subsidies annually. https://fortune.com/2015/03/27/us-postal-service/ https://fortune.com/2015/03/27/us-postal-service/
- ddingus 6y ago
  Note: I made no mention of conspiracy, nor it being partisan. Fact is both parties receive significant financial incentives aimed at privatizing the Post Office. There is no benefit to the American people down that path. That analysis is incomplete and inaccurate. 3 is particularly egregious. Compute it prior to the act, and the arguments evaporate. Another fact: That bill was, and remains unnecessary, and is intended to undermine an otherwise exemplary service. I won't respond to this again.

dragonwriter 6y ago

> I'm not American so I'm probably just used to other systems, but does a public service need to be profitable? A public service doesn't but the USPS is effectively run as a highly (and hostilely) regulated private monopoly, rather than a public service.

deleted 6y ago
[deleted]

mcv 6y ago

In my opinion a public service doesn't need to be profitable at all, as long as it provides benefits in more important areas. I'm all for free education and free public transport and all that. But in this case, the US (and EU) are subsidizing products that compete with local products, undercutting local products in price, in quality, and often not complying with safety standards, while also avoiding customs and sales taxes because the individual packages are too small to meet the limit. You're basically supporting unfair competition, and paying to undermine your own quality standards and taxes. There's no benefit at all to the country that's paying for this.

colechristensen 6y ago

If you remove the need for external funding, you also remove the political baggage that comes along with it. Cost centers in businesses are bad to be in because there is always someone around trying to squeeze you instead of support you. And unlike police who, when trying to be profitable are driven by perverse incentives to be corrupt, the post office doing more business is hard to see as a bad thing. Also as many others have mentioned, the Chinese shipping rates were much lower than domestic rates, to the level that cheap products made in the US couldn’t be given away for free cheaper than things could be imported from china. $0 + shipping cost more than similar products sold at a profit and shipped from China.

addicted 6y ago

There’s no reason for USPS to make a loss on this either. I can absolutely see a situation where products being shipped from China are given cheaper rates than products shipped domestically. In fact, I expect that’s how it should be. Simply because for products from China, USPS would be tying up with the Chinese postal service, and due to the massive volumes they have, they would be able to offer extremely low rates that they couldn’t offer anyone in the US besides Amazon and Walmart maybe. However, those rates should be profitable rates for USPS.

netcan 6y ago

No. I don't think this is about that though. This isn't about a policy that costs money, and creates benefits. It's not even really a policy. It's a side effect of quasi-diplomatic arrangements created decades ago... with no relationship between original goals and current outcomes. Maybe it makes sense to subsidize a national package delivery. IF so, they can make a policy that does this, but this one isn't it.

tehjoker 6y ago

No it does not. An easy example to see is public medicine that treats poor people. You can't squeeze blood from a stone, but a healthy population is overall happier and able to do things. However, it doesn't make money directly for anyone. Since the 1970s, the popular ideology of the ruling class is that government has to work like a buisness, and is a facet of "neoliberalism" -- the idea that markets are the best tool for every situation despite the numerous problems with them. In the US, the idea is to disdain public services unless they can be used to socialize a cost of doing business. The USPS has been allowed to function because it made shipping cheaper, which is the lifeblood of business. However, other political calculations are coming to the fore (such as international competition) so they are thinking of kneecapping cheap rates to China.