America’s bargain postal rates

Kevin Drum of Mother Jones looked at the new bill enacted by the Senate and noticed one thing missing—a increase in postal rates sufficient to cover costs.

Take a look at countries around the world that have smaller volumes of mail than us: they all charge higher postage rates. They have to. And as volumes keep declining in America, we’re going to need higher rates here too. Right now, a first-class equivalent stamp runs 75¢ in Germany, 72¢ in Britain, 82¢ in France, 98¢ in Switzerland, 97¢ in Belgium, and 63¢ in the Netherlands. There’s no way that we can stay at 45¢ as volumes decline and pretend that somehow everything will be hunky-dory.

But allowing the price of a stamp to go up is apparently even more of a political taboo than closing rural post offices. I suppose Democrats are afraid of annoying granny and Republicans are so intent on busting the postal carriers union that they don’t like the idea of anything that brings in more revenue. We are ruled by idiots.

via Mother Jones.

Postal rates are set by an agency called the Postal Regulatory Service.  Under a 2006 law, the price of first-class mail stamps, periodical delivery and other services in which the USPS is “market dominant” can be increased only by such amount as is necessary to keep pace with the rise in the Consumer Price Index.  The USPS is free to increase prices of services in which it is “competitive,” such as priority mail or commercial package delivery.

My impression is that the Postal Service’s main problem is an excessive requirement pre-paying pensions.  The bill passed by the Democratic-controlled Senate eases that requirement, saving the Postal Service $5 billion a year and allowing it to reclaim $11 billion in excess payments.  Whether it will survive the Republican-controlled House of Representatives is another question.

But Kevin Drum makes a good point.  Our so-called “snail mail” is a real bargain.   It’s one respect in which our government service appears to surpass foreign governments.  Why get rid of it?

Click on Rearranging the Deck Chairs at the Postal Service for Kevin Drum’s full summary of the bill.

Click on Senate approves bill to help United States Postal Service for the Los Angeles Times’ report on the bill.

Click on In praise of the U.S. postal service for my earlier post on the Postal Service.

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