If I start from the commonly held Boglehead premise that all money is fungible, and I see that the entire system operates at a loss, then isn’t the argument that one portion of that system subsidizes another merely a form of “mental accounting”? Further, the way any government or quasi governmental agency is statutorily permitted to count anything is often set in consultation with “stakeholders” through the federal register notice process, as well as through lobbying efforts.
I wouldn’t be surprised to hear that USPS can show reports demonstrating that the items they carry for the vast bulk mail industrial complex is more “profitable” despite receiving substantially less revenue per piece. But that doesn’t mean that a private sector auditor using GAAP methods would reach the same conclusion.
I understand that bulk mail is formatted and pre-sorted when it enters the postal system, but is the marginal cost of OCR on a handwritten letter, and printing a zip code barcode on the envelope, that much higher? Receiving Informed Delivery, and seeing that most of my junk mail is being scanned and imaged anyway, it’s hard for me to see the justification to charge them less per mail piece.
Is there some way to demonstrate that bulk mail subsidizes the rest of the (net loss making) system without it amounting to mental accounting?