The US Postal Service is going broke because of JUNK MAIL (bulk rate)

[NAO]

While talking with a conservative friend the other day, he said he could'nt understand why the USPS was going broke. Why are they charging too little to stay in business? Why don't they just raise the price of a stamp? How easy is that??!!

Well, just then his wife walks in carrying in the mail. It's a big handful - about a dozen flyers with plenty of offers, solicitations, etc. JUNK MAIL. No stamped letters.

So I suggested...maybe the USPS is charging TOO MUCH for stamps (since so little of their volume is letters) and is charging FAR TOO LITTLE for "bulk rate". I suggested that the taxpayers are basically subsidizing junk mail...and then wonder why the USPS is going broke!

I asked him how many letters he gets in the mail vs bulk rate junk (hardly any). Then I asked how much junk mail he gets from Fed-X and UPS. None. But they make lots of money on parcels, right?

So the private companies Fed-X and UPS are making profits, while the public USPS delivers junk at low cost.

HMMM....

[hobbit709]

1. Has more to do with this.

http://thinkprogress.org/economy/2013/04/25/1919381/postal-services-defazio/?mobile=nc

[NAO]

5. thanks for the link

I was just speculating... hadn't heard either of these points from media.

[Mika]

2. Nope.

Read this, inform yourself.

Congressman Finally Takes Action To Remove Needless Requirement Bankrupting The Postal Service
http://thinkprogress.org/economy/2013/04/25/1919381/postal-services-defazio/

[RebelOne]

3. Junk mail is the majority of what is in my mail box. n/t

[Systematic Chaos]

4. You are absolutely right.

I'll never forget the year I worked at a Domino's Pizza (the money wasn't half bad back in the early 90s), and how the owner was absolutely obsessed with getting his weekly flyers out and how he'd force the drivers to grab a valid coupon if one were being used before we could give the customer their food. It wasn't like a normal reminder thing every now and then; rather, the guy was completely nutso anal about it.

The profit from those flyers and coupons far outweighed the cost to get them out to area residents.

[DLnyc]

6. Yes, I agree, major scam

We are subsidizing floods of junk email, gumming up the works for the post office and adding to a huge waste of paper.

Unsolicited advertising should pay a HIGHER rate, not a lower one. Or, better, should just not be carried by the USPS at all!

[lunasun]

7. Nonsense! A teabagger in an airport cornered me and told me how the gubermint gets to send it's mail

for free and that is what is breaking the USPS..........even if it is true it most likely has been doing that from the start...
.I mentioned the outrageous pension prefunding requirement that was pushed on them and how it has been downhill since
but he didn't want to hear it .
junk mail may add to the problems too and distribution to more rural areas I would think

[exboyfil]

9. Teabag central is going to get a rude surprise if they

are successful in slaying the USPS dragon. Their constituency is far more dependent on USPS than urban democratic voters. Start closing down post offices across middle America and hear the howls.

[lunasun]

10. it will be Obama"s fault But yes business will be fine with UPS and FedEX

compared to ma and pa teabagger
I would think some rural areas may not be profitable for private outsourcing ooopsy

[exboyfil]

8. I would hope that USPS has some smart economists working for it

What is the variable cost for handling the junk mail and what opportunity cost is sacrificed by handling it. If these costs are covered with some extra profit, then handling the junk mail makes economic sense (societal externalities are another consideration - junk mail is an environmentally bad idea). The demand curve for mailing junk may may be very elastic, while that for first class mail is relatively inelastic. Junk mail is entirely based on return on investment for the businesses, while first class fits into silos like necessary (bill paying for those who forego electronic options and societal expectations like formal letters). Those still using first class can also be characterized as resistant to change (easier to accept price increase than change behavior - class inelasticity).

[mopinko]

11. taxpayers have not subsidized the usps since the days of

st ronnie of raygun.