Economics And The US Post Office

5 Pages 1235 Words

In the United States economy most markets can be classified
into four different markets structures. But, each and every market in
the United States is completely unique from the others. Generally the
best type of market structure for the general public is per-fect
competition because it creates the lowest possible price for the
public. There are some exceptions were perfect competition isn’t the
best choice for the public on account of various reasons. The United
States Postal Service is one of them and since the Postal Service is a
monopoly, it is its own market. This paper will discuss the budget
dilemmas that the postal service has faced for the past twenty years
and if it is in the best interest of the economy for the United States
Postal Service to continue as a monopoly.

The first time there was talk of privatizing the Postal
Service was in 1979 when the Postal Service was losing vast amounts of
money in the long run. But since the Postal Service is a necessity for
America, the government had to subsidize the service in order for it
to continue in operation. In 1979 the United States Postal Service had
a cash flow of $22.5 Billion and was additionally receiving $176
million from investing(#1, Intro). Even with this added revenue the
Postal Service was still greatly under funded on its own (#1, Intro).
During this time it was discussed to privatize the postal service and
introduce competition because of the extreme losses that the service
was experiencing. A positive argument for privatizing the Postal
Service was with numerous competitors in the market there would be
more efficiency and the public would receive lower prices. But this
would also increase the usage of resources, for example airplanes and
cars. One of the problems the Post Office had was its receipts from
consumer purchases that were submitted the next day after the
transaction (#1, i). If the receip...