Finding true "fat" in the government budget proves harder than it appears at first blush. Many commonly cited sources of "waste" like the National Endowment for the Arts, farm subsidies, and even individual weapons programs are just drops in the federal spending bucket. When one gets to the big spending programs, in fact, finding true waste is genuinely hard. But there's a big, big exception: A truly useless government agency with over a half million employees and $66 billion in annual spending. It has offices in every town -- more, it says, than Starbucks, McDonald's, and Wal-Mart put together -- and it does something that nobody needs. The government agency, of course, is the United States Postal Service. While plenty of reforms seem to be on the table -- the Obama administration has called for the elimination of Saturday mail delivery and many conservatives want to go further -- there's a strong case for simply ending the Postal Service altogether. Rather than tinkering around the edges, Congress and the Obama administration should seriously consider getting rid of the Post Office as it exists altogether by selling its brand and assets to the private sector and repealing its special privileges.
There's no doubt that postal privatization can work. At least two small countries, the Netherlands and New Zealand, have actually turned mail delivery over to entirely private firms with no real loss in service quality although both did see large numbers of post offices close. Other countries like Germany UK, Sweden and Israel have also moved towards privatization in various ways. Almost all developed countries -- even heavily regulated places like France -- now allow more competition for mail delivery than the United States.
Useless is a strong word but, quite fairly, it can and does apply to the Postal Service. The bulk of the revenue comes from comes from monopolies it has on magazines, junk mail, and first class mail. (The later, under current service standards, won't be delivered overnight to most addresses any after this year.) None of these things are necessary for the overwhelming majority of people: almost all written personal messages get delivered by e-mail, well over two-thirds of bills and all sizable magazines now have pretty good tablet editions. As for junk mail, well, what possible conception of the public interest indicates that it's desirable to get unwanted, paper-wasting advertisements all the time?
And these services are easily replaceable. Even when they do more harm than good -- environment-destroying farm subsidies, dependency-creating welfare programs -- a huge percentage government programs do things that the private sector almost certainly wouldn't do on its own. On the other hand, there isn't a single major activity the Postal Service undertakes that some private company doesn't do better and on a similar scale already. Indeed, in the area where it faces real competition, parcel delivery, the Postal Service has less than 10 percent of the market, higher prices, and slower service than its private competitors.
And, if there really is a large digital divide that stops people with lower incomes from accessing the Internet, $15 billion the postal service lost last year would be enough to buy a very nice computer for the ten percent of Americans who don't use the Internet already and bring broadband Internet to the four-to-six percent that doesn't now today. (You'll see higher numbers for Internet non-users but roughly half of all people who don't use the Internet today are less than five years old, in prison/jail/mental hospitals, or seriously disabled.)
Even five years ago, it was hard to envision how some products like magazines could survive without the Postal Service. Today, with widespread tablet computers and broadband Internet almost everywhere, there's no need for them any longer.
Now, before any budget balancers get too excited, it's worth noting that, since 1970, the Postal Service hasn't directly tapped Treasury directly in a significant way. (It gets a small allocation for free services it provides to the blind and military service members overseas.) Given that its debt for pensions and other costs seems almost certain to become a public obligation, no matter what happens, stopping the bleeding now is a good idea.
There's no need to beat around the bush or talk about preserving some sort of service. The Postal Service should go. Now.