The price of stamps has gone up again. Two pennies this time, from 39 to 41 cents. It won't break me. I personally only use about 20 stamps a month, so the increase will cost me an extra $4.80 a year.
Other people might have to pay more than I do. The price of post cards goes up all the time. Priority and express mail, certified letters, return receipts and most postal insurance costs go up as well. And of course, businesses use much more mail than a private person does.
If my price increase is minimal, why does it bother me? Because there is very little competition for the United States Postal Service. If the cost of soda goes up, I have the choice of going to another store and buying it, or choosing another brand. When the postal service raises rates on first-class letters, I'm out of luck because it's the only game in town.
To deliver first class mail, a company has to get an exemption from the postal service, and has to charge at least $3 per letter. It is a pretty effective government-enforced monopoly. Firms are allowed to deliver express mail and larger packages, but can't touch first-class letters.
The Postal Service also has other advantages over other package-delivery companies. It doesn't have to pay taxes on income, property or vehicles. It doesn't have to follow zoning laws or customs regulations. It can borrow directly from the U.S. Treasury at below-market rates, and it can demand debt payments from bankruptcies ahead of private firms.
Even with these advantages, the Postal Service announced a few years ago that it could save $1 billion by turning some of its overnight deliveries over to FedEx. So even after paying all the taxes and other costs the Postal Service doesn't have, FedEx can make money delivering overnight while the postal service can't.
Some economists have said the postal system subsidizes its overnight and express delivery services, where it has competition, by charging higher prices for first class mail, where it has a monopoly and nothing to keep it from raising prices.
The U.S. isn't the only country with a government monopoly on postal service, but the ranks are dwindling. The Swedish Post competes with two private companies. In Guatemala, the postal service itself uses some of the 250 private delivery services in the country. Germany and the United Kingdom have relaxed rules against private mail in recent years.
The postal service hasn't always operated under a monopoly. From 1839 to 1851, private companies used the emerging railroad
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