The venerable U.S. Postal Service announced last Friday that it lost $8.5 billion in the fiscal year that ended in September.  It is on pace to be completely broke by the end of 2011.  It is seeking freedom from onerous requirements that mandate Congressional approval for changes to delivery schedules and routes, closing post offices, and setting rates.

Meanwhile, Rep. Darrell Issa (R-CA), who is set to lead the House committee overseeing postal affairs, is determined to assure the USPS doesn’t require a taxpayer bailout, but is not supportive of helping it either.  Instead he’s urging the post office to consider further cost cuts so that it lives within its revenue.  This leaves the USPS in a bind no private company would have to endure.  The USPS can’t raise its rates, and it can’t cut back its service offerings either.  It doesn’t even have the right to go out of business.

A combination of two outside forces have dealt the USPS dramatic blows to its business model.  Delivery companies like FedEx and UPS together with the adoption of the Internet have significantly eroded the need for and the value provided by the USPS.  While it was an essential and effective part of our national infrastructure at one time, those days are largely gone.

Given the current groundswell of grassroots enthusiasm for private businesses being able to do things more efficiently than the government, it’s inexplicable why Congress is clinging to this anachronistic heavily federally regulated and backed delivery system.

It’s conceivable the argument could be offered that the postal service is a vital part of our communications infrastructure and in our national interest to assure it keeps running.  But if that’s true, it would be impossible to then argue that the Internet should remain under the auspices of private companies, and remain unregulated.

At its core, this is an ideology issue.  Either the government has an obligation over our communications infrastructure or it doesn’t.  If it does, then stop worrying about telephone companies and the post office and pay attention to wireless carriers and Internet service providers.  That is unarguably the core of our national communications network today.  If the government has no such obligation, then set the USPS free.  Let it live or die as a for profit company, or be bought out by one of its competitors.  That is the nature of capitalism.

Republicans are currently on both sides of this issue.  They want the post office alive and well and under the government’s thumb, yet they oppose regulation or nationalization of  ISPs and wireless carriers.  Points which are ideologically at odds with each other.  It’s time to pick a side.