Obama to Town Hall Gathering: The public health plan will be just like the US Postal Service

The president said, “UPS and FedEx are doing just fine, right? No, they are. It’s the Post Office that’s always having problems.” (Laughter.)

He’s got that right. The Postal Service is going to need a taxpayer bailout of $7 billion this year. And despite the president’s claim, it doesn’t have competition in its core market of letter delivery. It’s illegal for FedEx or UPS to undercut the government’s price on letter mail. It’s also illegal for any other entity to send mail to a Post Office Box. And the Postal Service maintains that they – not you – are the real owners of your mailbox.

This monopoly is supposed to be what allows the Postal Service to deliver a letter for 44 cents anywhere in the USA. What is the social value of charging the same price to send a letter from Boston, MA to Cambridge, MA as one from Tampa, FL to Wasilla, AK? I have not the slightest idea, and I suspect that few others do either. But it does make for a well paid public-sector workforce.

Ironically, the Postal Service can’t even make a profit, despite all these monopoly protections. And its victims are not FedEx and UPS, but small entrepreneurs whom the law forbids from launching inexpensive letter-delivery services in densely populated cities.

I have a proposal to redeem the Postal Service. Let’s put it out of its misery and use that $7 billion to cover the uninsured. Taxpayers spend about $42 billion of their federal dues to pay for uncompensated care for the uninsured. Eliminating the post office would cover one sixth of that!

Come on Postmaster-General: It’s time to step up and fall on your sword!

This blog post originally appeared on John Goodman’s Health Policy Blog.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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