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During a Morgan Stanley conference, billionaire Elon Musk advocated for the privatization of state-owned enterprises in the United States. He specifically cited the U.S. Postal Service (USPS) and Amtrak, the state-owned rail transportation company, as examples of companies that should be transferred to the private sector.
Elon Musk stated that the privatization of public services could increase efficiency and reduce the losses accumulated over the years. However, he acknowledged that this process would require the approval of the U.S. Congress.
Elon Musk highlighted his views on American state-owned enterprises during a conference organized by Morgan Stanley, one of the largest banks in the United States. He declared that “everything that can reasonably be privatized should be”, reinforcing his advocacy for reducing the government’s role in the economy.
The billionaire specifically mentioned USPS and Amtrak, two state-owned companies that, according to him, could be managed more efficiently by the private sector.
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Privatizing USPS and Amtrak May Require Congress Approval
Despite Musk’s advocacy, the privatization of these state-owned enterprises would not be simple. Amtrak, created in 1970, and USPS, which has over two centuries of history, are owned by the federal government and any change in their structure would require Congress approval.
So far, neither company has commented on the billionaire’s statements.
The State-Owned Enterprises Cited by Elon Musk and Their Financial Challenges
The USPS has been facing financial difficulties for years. Since 2007, the state-owned entity has accumulated over US$ 100 billion in losses, with a loss of US$ 9.5 billion just in the last fiscal year.
The decline in demand for postal services began in 1997, with the popularization of emails. Since then, the volume of mail has dropped by 80%, reaching the lowest level since 1968. Thus, Musk’s idea of privatization could help the company reposition itself in the market.
Amtrak, the state-owned entity responsible for rail transportation in the U.S., saw an increase in passenger numbers in 2024, surpassing pre-pandemic levels. The company recorded a 15% increase in trips, reaching 32.8 million passengers for the year.
Even with this advancement, Amtrak is still operating at a loss. In the last 12 months, the company had an adjusted operating loss of US$ 705 million, a reduction of 9% compared to the previous year.
The History of Losses of American State-Owned Enterprises
The digitization has accelerated the financial collapse of the USPS. With the drastic reduction in sending letters and physical documents, the state-owned entity hascome to rely on parcel delivery services to balance its accounts.
Despite the recent profit of US$ 144 million in the last quarter, the accumulated losses still represent a huge challenge.
The increase in the number of passengers shows that Amtrak still has relevance, but high operational costs prevent the company from turning a profit. The constant need for federal subsidies raises questions about its viability as a state-owned enterprise.
The privatization, advocated by Elon Musk, could attract new investments and improve service efficiency, but it would also face strong political resistance.
The U.S. Government’s View on Privatizations
The idea of privatizing state-owned enterprises in the U.S. is not new, nor did it start with Elon Musk. Last month, then-President Donald Trump suggested merging USPS with the Department of Commerce, aiming to reduce costs and increase efficiency.
The proposal generated controversy, as opponents argue that the measure would violate federal laws and could harm the provision of essential services for the population.
Any attempt to privatize state-owned enterprises like USPS and Amtrak would face resistance in Congress. Many politicians, especially Democrats, argue that these companies should remain under government control to ensure accessible services for the population.
Unions and worker groups also oppose privatization, fearing job cuts and the reduction of labor benefits.
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