On Dec. 30, 2025, the Danish postal service delivered its final letter, bringing an end to a tradition that had lasted for more than four centuries.
The decision, announced earlier in the year by PostNord — the company created through the 2009 merger of Sweden’s and Denmark’s postal services — reflected the country’s rapid shift toward digital communication. As part of the wind-down of physical delivery in Denmark, PostNord eliminated some 1,500 jobs and began removing around 1,500 of the country’s iconic red mailboxes.
Though some may mourn the institution’s passing, the Danish government’s response is basic economics. The vast majority of communications in Denmark, as in most modern nations, are digital. The convenient, instant replacement caused demand for letter delivery to plummet 94% since 2000.
“Most communication now arrives in our electronic mailboxes,” Andreas Brethvad, public affairs director for PostNord, told CNN, “and the reality today is that e-commerce and the parcel market far outweigh traditional mail.”
In other words, letter delivery was unnecessary. But Denmark is the only country in the world to axe its government-run letter delivery service — so far. This invites an important question: If shutting down government-run letter delivery is common sense, why are so few countries doing it?
The answer can be found in the modifier “government-run.” As the Nobel Prize-winning economist Milton Friedman once observed, there is nothing so permanent as a government program (even temporary ones!).
Friedman’s famous quote explains a phenomenon economists have observed for generations: Once government interventions are created, powerful incentives emerge to keep them in place — even long after the original justification has faded.
Passports, the federal income tax, the Patriot Act, the Transportation Security Administration, and even income tax withholding were all “temporary” measures that became permanent as incentives crystallized.
Post offices were intended to be permanent, but the problem they addressed no longer exists. The same incentives apply. Bureaucratic structures are far easier to establish than to dismantle.
The U.S. Postal Service is a prime example. Like Denmark, mail delivery in the United States is quite old — older than the country itself. And as in Denmark, letter delivery has cratered in recent years, even though USPS remains the largest mail-delivery service in the world.
Despite the high volume of mail delivery, however, the USPS has been losing money for years. Between fiscal 2007 and fiscal 2024, it accumulated roughly $109 billion in overall deficits.
The Government Accountability Office points to three causes of this ocean of red ink: high employee wages and benefits, mounting debt and unfunded financial obligations, and operating expenses that outpaced revenues.
Following Denmark’s lead and axing the USPS is efficient, but it’s not the only option available. Most countries continue to have government-run postal services because of entrenched interests, but several have found a middle way: full or partial privatization.
Germany began privatizing the Deutsche Post soon after the fall of the Berlin Wall. Though the government remains the largest shareholder, it has steadily reduced its stake, including selling off $2.3 billion in stock in 2024. The Japan Post began partial privatization in the 2010s, with continued reductions in the state’s share.
The United Kingdom’s Royal Mail followed a similar path. After passing the Postal Services Act in 2011, the government initiated a stock sale of the company in 2013, selling 60% of its shares at $4.43 per share. By October 2015, it had sold its remaining 14% stake, completing Royal Mail’s privatization. Economists point out that the Royal Mail now doesn’t just cost taxpayers nothing, but operates “with greater efficiency and customer satisfaction.”
Although many nations have been taking steps to eliminate government-run postal departments, the U.S. appears to be well behind the curve. Postmaster General David Steiner earlier this year said he “[doesn’t] believe that the Postal Service should be privatized,” despite the institution’s legacy of massive annual losses.
Things have changed since then, however.
Just last week, USPS learned it was losing its biggest customer. Retail giant Amazon announced the end of its 30-year partnership with USPS. In 2025 alone, Amazon accounted for about “$6 billion in revenue to the USPS … making up about 7.5 percent of the Postal Service’s total revenue.”
This is very bad news for USPS. Even prior to Amazon’s announcement, the postal service was projected to lose $80 billion in the coming decade. Those losses will now be much worse.
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Denmark was able to recognize that its country no longer needed a government-run mail service and took action. The U.S. should do the same. USPS is a poorly run, top-heavy, bureaucratic monstrosity that continues to lose billions of dollars year after year, despite constantly raising postal prices. Worse, without market incentives, there’s no clear path toward improvement.
It’s time to put the USPS out of its misery, or at least put it on the path toward privatization.
Jon Miltimore is the senior editor at the American Institute for Economic Research and the editor of the Daily Economy.