I’ve got nothing against postal workers. But I do have a bone to pick with their union (American Postal Workers Union, "APWU"). Have you seen the APWU ads on TV and print lately?
I think the ads are a lie.
The background is that as many as 3,700 post offices are going to be closed. The union hates that. The union is spending big bucks on a slick ad campaign in an effort to stave off the inevitable.
APWU President Cliff Guffey had this to say recently:
“We must dispel the persistent myth that our work is funded by taxpayers.”
The ads show happy postal workers and all that mail they drive around. The heart of the UPWU message is:
"The post office is funded solely by the sale of stamps and postage."
By what magic does the PO do all that good stuff they do without sucking at the taxpayer teat? Easy. They borrow billions at near zero interest rates from good old Tim Geithner. Tim is responsible for the Federal Financing Bank. This is an off balance sheet funding vehicle (“SPIV”). Take a look at the balance sheet as of June 30, 2011.
The PO issue is small potatoes. But in a much bigger way all of D.C. is following the lead of the PO. Steps I through V are being played out as I write. It may take a few days for the markets to figure this out. But they will.
What business is the government not subsidizing? That is the real issue.
AUTOMOBILES BANKS HOUSING ENERGY FARMING HEALTHCARE EDUCATION ...ETC..
The post office is important, without it you would have to email. Then we wouldn't have all
those educational commemorative stamps. How else would the public learn anything about history?
Yeah, can't wait for an end to farm subsidies. Human deflation big time. My arable land goes to the moon. Hence, the importance of like-minded neighbors.
moRe explain? me not understnd?
What is the problem here? It sounds like the USPS is merely using a little "Kolivakis Logic" on these numbers. It's all good!
That June statement does not look right to me. It looks like the final maturity date on all the loans is 24 hours after the start of the loan (Unless 6/02/11 refers to June/02/2111), and there's a lot more than 12.7 billion advance for one month alone.
Edit: It looks like the total advances for June alone is 38.8424 Billion dollars, so if they managed to keep their debt at around 12.7 billion for two consecutive months, that's a pretty impressive cash flow.
No. Your looking at rollovers of loans. Some (as you say) are very short term and re-roll every few days. That is why it adds up to $38b. Net Net the PO has negative cash flow.
Your observation is sound - the PO is lying through their collective teeth in the advert, but as for the premise that core services should not be subsidized, I'm not so sure. Criticism of an entrenched unionized workforce leaching off a behemoth is justified, but infrastructure and communications are the corner stones of a nation's economic growth, as long as the subsidies serve to enable the end users.
Going back to the June statement, thanks for the explanation but is this format normal? It seems to me as though they are deliberately hiding rollovers by advancing arbitrary numbers every working day, twice or more a day. The same loan split into chunks of 0.2 to 2 billion and rolled over every day is deceptive accounting surely? I've seen similar antics by small firms trying to make their company look bigger on paper (By increasing activity on their account) to get a higher credit rating, but not on this scale. Even if the "VIG" is less than 20 bps, applied every day, it is still quite substantial over the course of a year, even for a corporation with a turnover in excess of 65 billion dollars.
Anyway thanks for the article bringing this to our attention.
Having temporarily worked for the USPS a few times, I can state that the largest problem in the USPS is of course the Unionized workers, doing the bare minimum to keep from getting fired. In their defense, moving BILLIONS of pieces of mail from point A to point B, then doing the same thing all over again the next day is a monumental job.
Get rid of 2nd Class postage (which would kill a lot of junk mail!), and raise the postage rates to reflect the true cost of sending a letter from CA to Timbuk-tu!
Back in i978 or so, I worked as a substitute carrier for summer vacation coverage. It paid well for a college kid aummer job, but the union crap was bad even then. I got criticized for "walking too fast" - making the regular guy look lame. Every day, I HAD to go with the other guys to a 90 minute lunch at a local bar. The supervisor would be seen pulling in the lot and we'd all run out the back. I'm sure it still goes on today. Made me a big fan of unions (/sarc). I lasted a month and said the hell with it...
Right there with the global worldconomy as well i guess. The fact is bankrupting the entire edifice only makes money more dear. It's the government itself that loses When the only debt market with a bid is treasuries.
How is it not costing US taxpayers a cent when $12 Billion of magic money has been injected into the economy? Money printing has been known to increase all kinds of prices. How do these guys get $12 Billion anyway? Who decided? How much other "off balance sheet" items are out there?
I like the Post Office (or USPS, and I know the arguments that can be made as to what is the proper name, but bear with me here). But if it's a losing enterprise, then let it undergo a natural transformation, even if that means closing some offices. I think 3700 might be too many (we need SOME offices to service the more rural areas), but I think a good place to start would be the locations with overlapping service areas. Then the pension plans can be reviewed.
And after that...let's take a good hard look at other money-wasters like AMTRAK.
I'm not against all government-subsidized programs...just the ones that have been allowed to grow to absurd proportions and lose money hand over fist. There should be NO sacred cows in this new economic climate. All programs and departments should be reviewed for relevancy and restructuring.
Yes, including military and defense.
Especially the military. Their only purpose is to intimidate everyone else, including the American taxpayer. They haven't defended America for years. Check their performance on 9/11. Considering how much they cost, they are a complete abject failure. The officers should be fired and their pensions taken away.
Tweak their freaking nipples. Wedgies for all. 'Barbie' brand body armor.
As a global leader in mail delivery and successful corporate business practices, we maintain a talented workforce to support strategic initiatives that continues to generate revenue, reduce costs, achieve customer-focused results, and improve service. Our executive and administrative careers provide outstanding opportunities for career advancement and growth.
http://about.usps.com/careers/workplace-culture.htm
Add up enough small potatoes and you get a basket you can not lift...
Even strong Hulk has his limits! :>D
Threw out my back throwing a tank...
And the Markets will be right back after these Messages.
The enronomy continues.