4 ms·

Why does the postal service need to turn a profit? It's a government agency. Are any other government agencies required to be profitable?

• c3534l 6y ago
  It's not so much a government agency as it is a public corporation. In the days when the postal service was founded, large corporations were rare enough that they had to be created and initially funded by the government. Now we have financial markets and concepts that allow for the streamlined creation of large corporations, but it's closer to the modern concept of a utility than anything else.
  • djur 6y ago
    It hasn't always been a public corporation. USPS only dates back to 1970. Previous to that it was the US Post Office Department, a cabinet-level agency. It was reorganized in 1970 in response to a strike: https://en.wikipedia.org/wiki/U.S._postal_strike_of_1970 https://en.wikipedia.org/wiki/U.S._postal_strike_of_1970
• jessriedel 6y ago
  Yes? I think lots of government agencies that deliver services to paying customers are expected to cover their expenses. It's true that some government activities provide, say, non-excludable public goods using tax money, and so are not expected to collect sufficient revenue through distribution, but other government activities are intended to provide a service that can be valued and efficiently purchased by consumers. For instance, my family's street recently got a public sewer system (to replace septic systems), and the city charged homeowners one-time and recurring fees to cover the expenses of both installation and operation. If the city could not get the homeowners to pay enough to cover the cost of the sewer system, which was a real risk, the system would have been considered a mistake (and a project with similar economic prospects would likely been avoided in the future).
  • runako 6y ago
    > Yes? I think lots of government agencies that deliver services to paying customers are expected to cover their expenses. The big-ticket items I pay for as a taxpayer include schools (via local taxes), defense, retirees, and healthcare. None of those cover their expenses, and basically everything else combined is a tiny minority of government expenditure. (I believe we should more fully fund the non-defense parts of the budget, but let's not pretend they net out in the in-years.)
    • jessriedel 6y ago
      You're not disagreeing with me.
• sdinsn 6y ago
  > Why does the postal service need to turn a profit? It doesn't have to turn a 'profit' in the literal sense, but it needs to make more money than their current spending because they have to pay future pensions.
  • grafporno 6y ago
    So they have to turn a profit in the literal sense.
• missedthecue 6y ago
  How else will it grow and expand to better serve their customers?