USPS as a failed sovereign wealth fund

The U.S. government has a direct stake in natural resource wealth, collecting royalties from the extraction of minerals on federal land. In a good year, these royalties (which are dispersed to states) total around $20 billion, although the historic annual average is closer to $10 billion.

These figures pale in comparison to what is arguably America’s largest commercial endeavor: the U.S. Postal Service (USPS). The USPS relies on its vast network of land, buildings, trucks, and processing machines to generate about $80 billion in revenue per year. The obvious problem is that, unlike with Norway and Saudi Arabia’s black gold, the USPS can’t turn a profit on its large asset holdings. The agency lost $9.5 billion on net in FY 2024, and has burned through $100 billion over the past fifteen years…

To sum up: the U.S. isn’t Norway nor Saudi Arabia. Our largest asset-rich enterprise is really bad at making money and channeling investments to productive uses. And, it is for lack of trying; the USPS can do a far better job generating a return on assets such as property.

Here is the full Substack by Ross Marchand.