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US Postal Service, Costing $250 Million Daily, Posts Record $15.9 Billion Loss, May Run Out Of Cash Soon

Tyler Durden's picture




 

That the biggest government source of employment just posted a record $15.9 billion loss (bigger than the $15 billion expected previously), is no surprise to anyone: after all most are openly expecting the USPS to fold, the only outstanding question is whether it will transform into a company that is actually competitive with the private sector (unlikely), or liquidate (also unlikely in an era where government jobs are becoming the only form of employment available). Sadly, keeping this zombie alive costs all other taxpayers $250 million each day: money that could be used much more effectively in other areas of the economy, but won't. Because there are USPS votes that have to be purchased at cost. Perhaps the biggest surprise is that while the USPS had a total of 607,400 employees in October, this was the lowest number of total employees for the non-profit (but certainly loss-driven) government run organization since the 1960s! Perhaps most shocking is that the USPS peaked at over 900K employees in 1999 when it was still if not profitable (as it doesn't need to be by its charter) then certainly breakeven. Sadly those days are now gone, and the next thing to go will be all the promised benefits for the 600K or so employees.

From Bloomberg:

The U.S. Postal Service said its net loss last year widened to $15.9 billion, more than the $15 billion it had projected, as mail volume continued to drop, falling 5 percent.

 

Without action by Congress, the service will run out of cash on Oct. 15, 2013, after it makes a required workers compensation payment to the U.S. Labor Department and before revenue typically jumps with holiday season mailing, Chief Financial Officer Joe Corbett said.

 

The service, whose fiscal year ended Sept. 30, lost $5.1 billion a year earlier. It announced the net loss today at a meeting at its Washington headquarters.

 

“We are walking a financial tightrope,” Postmaster General Patrick Donahoe said at the meeting. “Will we ever stop delivering the mail? It will never happen. We are simply too important to the economy and the flow of commerce.”

 

The service is asking Congress to enact legislation before it adjourns this year that would allow the Postal Service to spread future retirees’ health-benefit payments over more years, stop Saturday delivery, and more easily close post offices and mail-processing plants.

 

Without legislative change, the service expects its losses to continue in the 2013 fiscal year, with a forecast loss of $7.6 billion, Corbett said.

 

“There is no margin of error,” given the low level of cash, he said. The service uses $250 million per day to operate.

More here

 

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Thu, 11/15/2012 - 11:41 | 2984155 docj
docj's picture

No worries. President ChoomPrompter will bail them out from his "stash".

(feels a pain in the area of my wallet)

Thu, 11/15/2012 - 11:50 | 2984196 Stoploss
Stoploss's picture

Kill that fucking thing already, for fuck sakes..

Thu, 11/15/2012 - 11:58 | 2984232 sickofthepunx
sickofthepunx's picture

when the "for profits" decide it is not cost effective to deliver mail to your doorstep, you'll wish you had the USPS

Thu, 11/15/2012 - 12:07 | 2984272 Ignatius
Ignatius's picture

I ran a back of the envelope calc awhile back and found that first class mail is less in real terms (gold) than back in the 60's when I was growing up. 

Bashing the Post Office is quite fashionable these days and I'm sure there's room to criticize, but we will surely miss it if/when its gone. 

Thu, 11/15/2012 - 12:21 | 2984323 Enslavethechild...
EnslavethechildrenforBen's picture

Fire all the stupid Bankers, Politicians and Cops first.

If that doesn't take care of the problem, nothing will

Thu, 11/15/2012 - 13:11 | 2984380 francis_sawyer
francis_sawyer's picture

When Al Gore invented the internet, all hell broke loose for the USPS... But it's a good thing that smart folks like 'Leo K' were able to profit so handsomely off of AG's next hobby after that...

Thu, 11/15/2012 - 12:29 | 2984352 Titus
Titus's picture

The problem is a bush era requirement that the pensions are fully funded. Fulfilling this requirement is causing the whole problem.

What organization would not face the same problem if faced with this requirement in the current 0% interest rate climate?

Thu, 11/15/2012 - 15:27 | 2985159 sunnyside
sunnyside's picture

I understand your point, but shouldn't ALL organizations have fully funded pensions if they offer them?  Any that is not funded will either fail shortly or be cast to the taxpayer.

Thu, 11/15/2012 - 13:27 | 2984597 TWSceptic
TWSceptic's picture

I thought most people here would be smart enough to understand that the real costs of a government-owned corporation are much higher than the price you pay directly as a consumer.

Thu, 11/15/2012 - 13:55 | 2984722 Thisson
Thisson's picture

Yeah, I'm really gonna miss receiving junk mail and physical billing statements... NOT.

Thu, 11/15/2012 - 14:36 | 2984913 PhilB
PhilB's picture

Jesus....there seems to be a lot of postal office workers with time on their hands here or the world has gone crazy, yet again. The comments are right..kill the Post Office. There is absolutely nothing you need by mail these days. Packages can come by private carriers. Actual mail, letters, magazines, etc..should cost a fortune to deliver cause it is not vital to the economy anymore and is killing us. It 5 B last year loss, 15 B this year, and 7 B projected for next year. Math= 27 Billion in three years! That is crazy. No one here can post an argument for the post office with this kind of losses unless you or your family members work in one! Get real and a life..

Thu, 11/15/2012 - 15:30 | 2985184 sunnyside
sunnyside's picture

Our constitution calls for a post office.  Right or wrong with changing times lets not ignore it, but lets change the constitution and then kill the USPS.

Thu, 11/15/2012 - 16:03 | 2985322 PhilB
PhilB's picture

Actually our Consitution "empowers" Congress "to establish Post Offices and post Roads". It is not an obligation  to create a Post office nor maintain one. No need to change the consitution at all to get rid of the Post Office, only need to change the interests of the big cow whose teat these people suckle.

Thu, 11/15/2012 - 13:07 | 2984515 SmallerGovNow2
SmallerGovNow2's picture

The USPS does NOT COST THE TAXPAYERS AT ALL!!!  This story is mis-informed.  The post office simply defalted on their payment to the retiree trust fund (mandatory payments that congress makes the USPS do that congress does NOT do for SS/MC/MC - hence all our "unfunded" liabilities). 

Congress MAKES the USPS deliver 6 days a week and will not ALLOW the USPS to reorganize to become more profitable.

And if you think that UPS or Fedex is going to deliver a letter to your front door for 50 cents, you got another thing coming.  In fact, the US postal service is the "last mile" delivery and pick up mechanism for BOTH UPS and Fedex.  Without the USPS neither of these "overnight" specialty shipping companies could maintain their business model.

Sorry Tyler, but you need to do A Lot more research on this topic.  BTW, I always enjoy your site and your posts...

Thu, 11/15/2012 - 13:28 | 2984621 SmallerGovNow2
SmallerGovNow2's picture

Those that down arrowed me do not want the truth, because I wrote the truth....  Stay ignorant then...

Thu, 11/15/2012 - 13:34 | 2984651 Ignatius
Ignatius's picture

Hey, he read Ayn Rand, which he'll be many years in recovery.

Thu, 11/15/2012 - 13:59 | 2984742 Thisson
Thisson's picture

No, you're being down-arrowed for your myopic view.  Maybe 50 cents isn't the right price to deliver a letter.  Maybe the postal service conducting the "last mile" service for UPS and Fedex is simply another corporate subsidy that the taxpayer is burdened with?  It could also be viewed as a subsidy to rural users of postal services.  Maybe all of these services need to be repriced higher, and made more expensive, and maybe then it would not be economic for all these senders of junk mail advertising, credit card offers, etc.?  This entire thing is one huge malinvestment.  And postal staff are hugely overpaid when it comes to what they would actually receive for their services if forced to seek jobs in the private sector.

THAT BEING SAID, it's still one of the few constitutionally authorized government functions, so I don't mind some level of expense to maintain the postal system.

Thu, 11/15/2012 - 13:29 | 2984626 TWSceptic
TWSceptic's picture

You can change your nick to BiggerGovNow

Thu, 11/15/2012 - 13:41 | 2984674 alangreedspank
alangreedspank's picture

You want a SmallerGovNow and you can't even think of the mail being delivered by someone else than the state? Are you fucking kidding me ?

Thu, 11/15/2012 - 15:04 | 2984994 Zymurguy
Zymurguy's picture

It's going to cost someone a LOT soon if this doesn't get fixed!

Thu, 11/15/2012 - 13:18 | 2984525 TWSceptic
TWSceptic's picture

What a dumb comment, of course they will deliver, you just may have to pay more when you live more isolated, as it should be. But thanks to more competition and higher efficiency, prices will decline and quality will go up overall.

Thu, 11/15/2012 - 13:51 | 2984703 alangreedspank
alangreedspank's picture

Sounds about right, but costs might not go down right away as they'll be brought in the "seen" area as opposed to now, in the "unseen".

Thu, 11/15/2012 - 13:38 | 2984668 alangreedspank
alangreedspank's picture

Which is why the "for profits" have long since invented....the email...for profits.

Thu, 11/15/2012 - 12:08 | 2984280 eclectic syncretist
eclectic syncretist's picture

Oh no!  I won't be able to get spammed with junk mail anymore.

Thu, 11/15/2012 - 12:14 | 2984302 Ignatius
Ignatius's picture

Junk mail = free fire starter.

I also enjoy knowing -- daily -- that somebody cares....

Thu, 11/15/2012 - 12:22 | 2984325 insanelysane
insanelysane's picture

and by free you really mean $250 million/day.

Take it away and then if I miss it we can put it back.  This is why the govt never gets shut down even though it is sometimes used as a threat.  People won't miss it and the govt knows it so they just bluff about shutting down.

Thu, 11/15/2012 - 13:16 | 2984544 The Wizard of Oz
The Wizard of Oz's picture

So we're adding $2.3 billion to the deficit daily and of that $250 million is from the USPS alone? So it accounts for ~11% of the daily deficit? 

Thu, 11/15/2012 - 14:06 | 2984779 Omen IV
Omen IV's picture

it is a republican accounting gimmick -

there is no loss - public corporations that have pension liabilities do NOT account for future retirees benefits the way the postal corp was required by the republicans - this is all about union busting just like romneys decision not to save the auto industry - they want the unions dead !! so the democrats do not have people on the ground for elections

Thu, 11/15/2012 - 14:55 | 2985007 Zymurguy
Zymurguy's picture

Accounting fu... you have big powah!

Accounting tricks, smoke and mirrors.

Fri, 11/16/2012 - 12:08 | 2987996 HangSorosHigh
HangSorosHigh's picture

Democrats have people in the ground for elections.

Thu, 11/15/2012 - 13:17 | 2984553 vast-dom
vast-dom's picture

QE to the USPS workers minus their jobs and operating costs = Neo-Keynesian welfare solution. 

Thu, 11/15/2012 - 13:45 | 2984687 bunkerhillmob
bunkerhillmob's picture

 

Home > Opinion > Latest Columns  Fredric Rolando: Congressional politics to blame for Postal Service’s red ink           Comments (1) A Text Size

Published: 30 September 2012 10:14 PM

Few institutions in the country interact as much with Americans as the U.S. Postal Service, which delivers mail to 150 million addresses six days a week. Letter carriers — one quarter of them military veterans — provide Americans and their businesses with the world’s most affordable delivery service. Rooted in the Constitution, the USPS is viewed positively by 80 percent of the public.

Conventional wisdom is that the Postal Service loses billions of dollars a year because mail has been replaced by the Internet, taxpayers are on the hook, so cuts must be made. Folks deserve to know the story behind the headlines.

The Postal Service has performed well in operational terms, nearly breaking even despite the worst recession in 80 years. Some periods it’s been profitable delivering the mail — including a $200 million operational profit in fiscal 2012’s first quarter — while in others it’s lost some money. It hasn’t used a dime of taxpayer money in 30 years, funding itself by selling stamps and other products.

There is red ink. But it has little to do with mail volume, email or other mail-related issues. Instead, 80 percent of all the red ink stems from an external factor — congressional politics.

In 2006, Congress mandated that the Postal Service pre-fund future retiree health benefits, something required of no other agency or company. And lawmakers made it all the more unrealistic by requiring that pre-funding cover the next 75 years — all paid within a decade.

Before this unreasonable burden, the Postal Service was making billions in annual profits. But the mandate has exhausted profits, savings and borrowing authority, while creating an artificial crisis that has distracted the agency from doing what it’s always done — adapt to an evolving society. For 200 years, the Postal Service has met technological changes, including the telephone, telegraph and fax machine.

If Congress fixed the mess it created, the Postal Service could focus on developing a forward-looking business plan that taps into existing opportunities. For example, while more people pay bills online, they also order goods online. That exploding e-commerce market already is boosting USPS revenue as FedEx and UPS increasingly turn to its highly efficient network to deliver their packages, saving money for private carriers and their customers. Far more could be done to capitalize on this.

Congressional action to rectify its unfair mandate is common-sensical. Reducing services and dismantling the nation’s only truly universal delivery network, as some propose, is precisely the wrong approach, because it ignores the actual problem and instead attacks what’s working.

This would particularly hurt a large state like Texas. Those hardest hit by losing Saturday delivery or house-to-house service would be the Lone Star State’s elderly, rural residents, people needing medicines on weekends — along with small businesses (and their 1.4 million Texas employees) open weekends and needing to send and receive financial documents.

Degrading the network also would be counterproductive for the USPS by driving away customers and reducing revenue, while making it difficult to capitalize on rising Internet orders. The best day to deliver packages: Saturday, when people are home.

The stakes are high: The $1.3 trillion national mailing industry relies on a robust Postal Service to employ 7.5 million Americans in the private sector — including 609,024 Texans.

If people make their voices heard, lawmakers just might do the right thing — for Texas and for America.

 

Thu, 11/15/2012 - 15:03 | 2985046 Zymurguy
Zymurguy's picture

Good info, thanks!

I better understand the burden upon the USPS and if this above is true, we need to get our elected officials to correct the problem.  Sounds like a pretty simple fix.

So simple that I wonder why hasn't it been fixed already?  If it is a GOP vs. Dem thing they why haven't the Dem's fixed it when they had both houses?  I am not a big fan of unions and I really am against public sector unions but even from my standpoint it would seem best to fix this problem regardless of how much you may dislike unions.

Not trying to bash the USPS or it's union... just something doesn't add up.  Seems really like neither big political parties want it fixed.

Zym'

Thu, 11/15/2012 - 11:42 | 2984161 buzzsaw99
buzzsaw99's picture

the junk mail must get through!

Thu, 11/15/2012 - 11:45 | 2984171 bigdumbnugly
bigdumbnugly's picture

yes, it would be heartbreaking to see Cliffy standing at the end of the off ramp with a work for bar tab sign.

Thu, 11/15/2012 - 11:51 | 2984204 JPM Hater001
JPM Hater001's picture

"Will we ever stop delivering the mail? It will never happen. We are simply too important to the economy and the flow of commerce.”

Yes, candle makers were very important at one point too.  You could say we couldn't do without them...until we could.

Thu, 11/15/2012 - 12:34 | 2984381 DarkAgeAhead
DarkAgeAhead's picture

Actually I'm not so sure that we do all that well these days without candles.  Sandy?

Thu, 11/15/2012 - 11:43 | 2984165 Quinvarius
Quinvarius's picture

Stamps need to be like $2.50 to compensate for hyper inflation.

Thu, 11/15/2012 - 11:50 | 2984202 SpykerSpeed
SpykerSpeed's picture

Too late, I already bought a bunch of "forever stamps" for like 42 cents.  They're screwed.

Thu, 11/15/2012 - 12:01 | 2984245 pokrova
pokrova's picture

Forget silver and gold.  Invest in "forever stamps" they will be worth a fortune!

Thu, 11/15/2012 - 12:07 | 2984275 catacl1sm
catacl1sm's picture

I've considered that, but 'they' would probably come after you for price gouging in an inflationary environment.

 

Thu, 11/15/2012 - 11:54 | 2984218 James-Morrison
James-Morrison's picture

Invest in "Forever Stamps".

They will either double in value within a few years as inflation ramps, or become collector's items within a few decades (after the demise of USPS).

Plus a few thousand invested now will help the USPS cash flow.

Postage is only go up.

Thu, 11/15/2012 - 12:17 | 2984311 Ignatius
Ignatius's picture

This assumes that 'the promise' will be kept.  Kinda like a bond, that way.

Thu, 11/15/2012 - 12:33 | 2984374 Intoxicologist
Intoxicologist's picture

Whenever I walk into the post office to purchase stamps, I ask the postmaster this:  "If they're called 'Forever' stamps, how come I have to keep buying them?"

Deer-in-headlights look follows.

Thu, 11/15/2012 - 12:35 | 2984383 TheCanadianAustrian
TheCanadianAustrian's picture

I think within a few years they're simply going to "default" on their stamps. They'll raise the price of a stamp to $5 (or whatever) and declare the forever stamps redeemable for 43 cents or whatever the last issue price was for the stamps. Politically, they can get away with this by saying "Unforseeable circumstances have forced us to bring the permanent stamp program to an unfortunate end."

Thu, 11/15/2012 - 13:45 | 2984686 alangreedspank
alangreedspank's picture

Yup. LOL @ "Unforseeable".

Thu, 11/15/2012 - 12:00 | 2984237 sickofthepunx
sickofthepunx's picture

the cost of a stamp in the 1860s in inflation adjusted dollars is $5.60.

 

 

Thu, 11/15/2012 - 11:44 | 2984168 q99x2
q99x2's picture

Don't start picking on the post office before the Holidays. I spent half a lifetime waiting in line last year.

Thu, 11/15/2012 - 14:19 | 2984828 Midas
Midas's picture

They will come to your door and get your stuff.

Thu, 11/15/2012 - 11:52 | 2984169 HD
HD's picture

Off topic but interesting: footage of high speed drones over Denver

 http://gawker.com/5960588/local-news-crew-confirms-denver-mans-ufo-claim...

Thu, 11/15/2012 - 11:57 | 2984230 Peter Pan
Peter Pan's picture

Actually the USPS could improve the image of drones by using them to deliver parcels to hard to get to places on time.

Thu, 11/15/2012 - 12:05 | 2984260 slackrabbit
slackrabbit's picture

wow 

Thu, 11/15/2012 - 13:34 | 2984652 IrritableBowels
IrritableBowels's picture

Cool flies.

Thu, 11/15/2012 - 11:46 | 2984178 ziggy59
ziggy59's picture

May run out of cash soon??
They can just print more stamps, maybe with Ben Bernankes face on it..
Charge a dollar and all would be well again...

Except the FED does same crap only bigger, not sticky and with faces of people that i wouldnt want to wipe my ass with.

Thu, 11/15/2012 - 12:41 | 2984257 John Law Lives
John Law Lives's picture

Maybe Uncle Ben could print up $1 million for every US citizen and have the USPS mail the money to each citizen $1 at a time.  That should stimulate the economy... though there might not be many trees or cotton plants left afterward...

Thu, 11/15/2012 - 11:46 | 2984180 desirdavenir
desirdavenir's picture

AFAIK, 16 billions par year is more like 43 millions par day.

But agree, 43 millions for daily expenses of 250 millions, it is quite a lot...

Thu, 11/15/2012 - 11:48 | 2984185 jcaz
jcaz's picture

Blah- workers who have been retired for 20 yrs are making more now than the day they retired, with a full health package to boot.....

Next up-  Military pensions......

Thu, 11/15/2012 - 11:48 | 2984188 the not so migh...
the not so mighty maximiza's picture

The comming bailouts will be staggering, FHA, FEMA, USPS etc etc, they will have to tax everyone 100% and then even the unborn.  Destruction is assured.

Thu, 11/15/2012 - 13:53 | 2984716 alangreedspank
alangreedspank's picture

You're forgetting the Fed which won't get a dime for the worthless toxic assets they put on their books.

Thu, 11/15/2012 - 11:48 | 2984189 Bangin7GramRocks
Bangin7GramRocks's picture

So, let me get this straight. I'm easily confused. Hard-working regular Americans who bust their asses for a living are now "government mooches"? Wow, this race to the bottom is happening at such a breakneck speed I can't keep up. Waaaaa! My greedy asshole corporation took away my pension so I don't believe anyone should have one! Waaaaaa!

Thu, 11/15/2012 - 12:08 | 2984281 MachoMan
MachoMan's picture

Yes.  If you work for the government...  you are necessarily a government mooch...  directly through the extent that your employment isn't funded by your activities (e.g. stamps; the remainder being handouts from taxpayers or other creditors) and indirectly through all consequences of a government mandated monopoly.

For those of us who are in a position to be forced, at gunpoint, to pay for others' pensions in a system we will never get to partake (at the very least at an inflation adjusted level we will never get to partake), we're not too thrilled about the prospects of contribution.

Thu, 11/15/2012 - 12:35 | 2984386 Bangin7GramRocks
Bangin7GramRocks's picture

Pensions are merely deferred compensation guaranteed by a contract. I bet you were one of those screaming that the AIG criminals should get all there money because it was in a contract. And really, what about all of the paper shuffling traders of equities or bonds? All non-productive leeches on society. And I indirectly pay for every blowjob, Porsche 911 and $1500 dinner.

Thu, 11/15/2012 - 14:13 | 2984805 Thisson
Thisson's picture

Those pensions were not bargained for in arms'-length negotiations.  And traders perform a vital role allocating capital.  Not that the system is perfect (e.g. where traders impose excessive long-term risks in order to get short-term payouts), but at least their pay is set by the private sector's supply and demand for labor, unlike postal wages & benefits.

Thu, 11/15/2012 - 14:49 | 2984980 MachoMan
MachoMan's picture

So because I don't advocate for keeping the postal service, then I'm an advocate for AIG?  That's some sound logic.  Might even be a false dilemma.

What about all the "paper shuffling traders of equities or bonds"?  Aside from the fact that they're not the subject of the discussion...

Thu, 11/15/2012 - 13:13 | 2984534 SmallerGovNow2
SmallerGovNow2's picture

Postal workers are paid from proceeds of stamp sales and delivery fee's.  They get NO taxpayer money at all...

Thu, 11/15/2012 - 14:26 | 2984860 Midas
Midas's picture

Smaller, et al.--

Just give up.  This is about the sixth article on the USPS in the last year and no matter how many times you point out the obvious, some people go into a sub-routine about taxpayers and being forced to do something.  If the USPS was funded by taxpayers we wouldn't be having this discussion.  The bernanke would just print the damn money!  And the USPS is one government agency that you are not compelled to use, if you don't like them, don't buy any stamps.  How do I get out of funding, CIA, NDAA, the pentagon, Dept, of "educasion" FBI, TSA, EPA, etc, etc, ad naseum? 

Thu, 11/15/2012 - 16:52 | 2984968 MachoMan
MachoMan's picture

Would you folks care to discuss the money borrowed by the USPS from the treasury?  Care to comment as to why it was mandated that the USPS go ahead and prefund its retirement obligations?  From an accounting standpoint, your argument is specious at best.

Also, from post below:

herpa derp.

Congress postponed the mandatory pre-funding for FY ending in 2011...  and the postal service still had a $5.1b loss.  http://www.businessinsider.com/heres-how-the-post-office-lost-5-billion-...

That ~$5b + 2012's ~$6b amount was $~11.1b for 2012...  the USPS posted a $15.9b loss for FY ending in 2012.  http://www.nytimes.com/2012/11/16/us/politics/postal-service-reports-a-n...

So...  even accounting for this horrendous pre-funding requirement, the USPS is still leaking like the titanic.  Any more fairy tales?

Thu, 11/15/2012 - 17:57 | 2985804 Midas
Midas's picture

No fairy tales-- you have good points, I hope I didn't imply business was rosy.  Another item you need to know is how much money they have in the bank.  Cash.  They rarely report it, but it somewhere around 50 billion.  This is money they are using to pay current retirees.

Business is not good.  I said elsewhere on this thread I feel they need to do a combo of postage increases and wage cuts.  A 5 billion loss is roughly 8% of their budget, not impossible to close.  Since 2006 the postage rates have been tied to inflation.  If you had a business designed to break even and your income was tied to the government's inflation rate and your expenses were tied to the real world's rate, where do you think you would be 6 years later?  Cheers.

Fri, 11/16/2012 - 00:07 | 2986745 MachoMan
MachoMan's picture

Why the hell do you borrow $15b from the treasury when you have $50b in the bank?  The math doesn't compute...

Thu, 11/15/2012 - 11:51 | 2984193 fuu
fuu's picture

$250,000,000 is only 4 hours worth of monetization at the current pace.

Thu, 11/15/2012 - 11:49 | 2984197 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

My understanding is that once someone at the USPS figures out how much money the USPS would save by using FedEx, that person will be fired, and the person who fired them promoted.

 

The US Postal Service looks like an embarrassing exercise in unrelenting futility - until you consider Congress.

 

Zing!

Thu, 11/15/2012 - 12:22 | 2984326 Urban Redneck
Urban Redneck's picture

ZIRP!  KILLS <savers and pension funds> DEAD.

Thu, 11/15/2012 - 13:15 | 2984540 SmallerGovNow2
SmallerGovNow2's picture

Fedex would not deliver US mail at all.  It doesn't fit their business model.  USPS are the "last mile" carriers for Fedex and UPS that will NOT carry to rural routes and small towns...

Thu, 11/15/2012 - 13:59 | 2984734 alangreedspank
alangreedspank's picture

USPS is not delivering cheaply in remote areas because they are more competent, it's because they're actually MORE incompetent and can't figure out what the prices of their services should be (hence their shitty financial situation). And BTW, I see plenty of USPS/FedEx trucks in suburban/countryside areas here in Canada.

Thu, 11/15/2012 - 14:29 | 2984878 Midas
Midas's picture

You see USPS trucks in the countryside of Canada? 

Thu, 11/15/2012 - 14:36 | 2984916 alangreedspank
alangreedspank's picture

lol, meant UPS and Purolator too.

Thu, 11/15/2012 - 14:40 | 2984934 Midas
Midas's picture

Oh, okay, I thought we had a possible solution to their budget problems.

Thu, 11/15/2012 - 11:50 | 2984198 lostcause
lostcause's picture

 The only thing I can think of that the government does better than the private sector is war. The government destroys everything it touches.

Thu, 11/15/2012 - 11:50 | 2984201 jimijon
jimijon's picture

Man,,, they had it made. Too bad they were so government tunneled visioned out about what their duty was and that duty was communication. Throughout all our changes in the last 50 years, communication has always been profitable. It is just that it has changed from letters on horses to bits in the intertubes. 

They should have offered free email addresses to everyone. But they were shackled as another brittle overgrown fed agency.

Heck they should do 100% reserve banking for the masses and completely change the game.

So much potential being squanderd.

sigh.

Thu, 11/15/2012 - 11:51 | 2984203 tooriskytoinvest
tooriskytoinvest's picture

This is doom:

THE WORLD IS HEADING TO A DOUBLE-DIP: JOBLESS, INFLATION, POVERTY, RECESSION... NIGEL FARAGE THINKS IT'S REVOLUTION TIME

http://investmentwatchblog.com/the-world-is-heading-to-a-double-dip-jobless-inflation-recession-nigel-farage-thinks-its-revolution-time/

Thu, 11/15/2012 - 12:23 | 2984329 slackrabbit
slackrabbit's picture

yea

 

his king world  news interview today

 

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2012/11/15_MEP_...

 

 

Thu, 11/15/2012 - 13:14 | 2984539 forwardho
forwardho's picture

TRTI, thanks for link. powerful words of truth. Once the pin on a grenade is pulled, it wiil explode.

Thu, 11/15/2012 - 11:52 | 2984206 Hunter S. Thompson
Hunter S. Thompson's picture

So what has changed so much that the USPS can't be profitable?

<snark>I mean with the Fed keeping inflation running low, expenses can't have gone up much. </snark>

Thu, 11/15/2012 - 11:52 | 2984208 RSDallas
RSDallas's picture

Somebody shoot that horse!

Thu, 11/15/2012 - 11:52 | 2984211 pods
pods's picture

Stop delivery, just maintain Post Offices.  As per the rules set up for them (Article I, Section 8).

This near daily delivery to nearly every household is merely a make work program.  

The amount of fuel used and what is actually delivered is a joke.  
Yay! More pizza coupons and Victoria's Secret Catalogs. 

pods

Thu, 11/15/2012 - 12:09 | 2984285 Offthebeach
Offthebeach's picture

Make the employees TSA local state security agents and have the keep tabs on all of us.( For the greater good, of course. )

Muppets in times of stress can get strange ideas and need watching and correct thinking
.

Thu, 11/15/2012 - 11:53 | 2984214 Agent P
Agent P's picture

Turns out $0.45 just isn't enough to profitably hand deliver a letter from someone in Maine to someone in Hawaii on a Saturday...shocking!

Thu, 11/15/2012 - 12:01 | 2984242 docj
docj's picture

Precisely - so the USPS should be compelled to charge what it costs to actually deliver a letter from someone in Maine to someone in Hawaii on a Saturday OR they should cut their operating costs to match their income.

No More Free Sh*t.

Thu, 11/15/2012 - 11:53 | 2984215 asteroids
asteroids's picture

The USPS did not exist 300 years ago and needs to go the way of the horse and buggy. Should this nonsense continue the horse and buggy may come back in style soon.

Thu, 11/15/2012 - 11:54 | 2984221 slackrabbit
slackrabbit's picture

Q:What do you do with Zombies?

A: You shoot them in the head!

Thu, 11/15/2012 - 11:54 | 2984222 youngman
youngman's picture

The Wal Street boys should take them public....they could make billions...stock options galore...

Actually......Postal Unions .....Obama.....they will get the money..no problem

Thu, 11/15/2012 - 11:56 | 2984224 Conman
Conman's picture

The last time two timesi n the past 6 months i was forced to use USPS, they took 2 weeks to deliver my priority 2-3 day packages. Each time i complained and nothign was done.

Thu, 11/15/2012 - 13:09 | 2984522 goldfish1
goldfish1's picture

Never a problem with the USPS. Excellent service. Love sending cards and packages and business mail with confirmed delivery.

Convenient locations and hours...simple solution to start, cut benefits to normal including retired pensioners and pensions to be. Close Saturdays. Eliminate junk mail rates and cut employees by 25% across the board starting with administration. Wait three months. Evaluate deficit. Cut deficit in half again using the same method. Repeat.

Thu, 11/15/2012 - 14:35 | 2984898 Midas
Midas's picture

Not bad goldfish, but what makes you think they can cut employees by 25%?  They are down from 900000 to under 600000 which percentage wise is more of a drop than the mail volume.  My idea is raise postage 5% and cut wages 5% and then wait three months.  Evaluate deficit.  Lather rinse, repeat. 

Fri, 11/16/2012 - 10:13 | 2987454 goldfish1
goldfish1's picture

You are more prudent that I. Perhaps your plan is a better fix. Include pensions and benefits in that wage cut.

Thu, 11/15/2012 - 11:58 | 2984231 Rustysilver
Rustysilver's picture

I ask my postman not to put junk mail into mailbox that I bought but don't own,

he said he coundn't do that. It the law.

Thu, 11/15/2012 - 11:59 | 2984235 Jason T
Jason T's picture

The peak of Postal Worker employment marked the peak of the US Empire.

In twenty years, the worlds financial center will be in Shanghai China.

Thu, 11/15/2012 - 14:21 | 2984842 Thisson
Thisson's picture

Doubtful.  China has all of the same problems that the US has.  For example, we have a lot of debt - and they have us as their debtor!  For every problem we have, the have the flipside of the same problem.

Thu, 11/15/2012 - 12:33 | 2984250 DarkAgeAhead
DarkAgeAhead's picture

Ever think the feudal powers that be are killing the USPS?  It's a lot tougher for them to read [spy on] your paper mail than your virtual mail.  I'm no fan of big government, but the USPS is one institution that I hope stays.

Thu, 11/15/2012 - 12:05 | 2984255 foodstampbarry
foodstampbarry's picture

It's a good thing we can print money, forever.

Thu, 11/15/2012 - 12:07 | 2984268 Cman5000
Cman5000's picture

I have a friend the works for the post office he's in total denial. Normalcy bias comes to mind they will never cut my job and people need the post office ...

Thu, 11/15/2012 - 12:07 | 2984269 Peter Pan
Peter Pan's picture

The USPS losses are probably even greater if you take into account the forever stamps issued.

Thu, 11/15/2012 - 14:23 | 2984849 Thisson
Thisson's picture

Yeah, but it's the same business model as AIG.  Write options and retain zero reserves.  Generates revenue that can be booked immediately, and the inevitable loss is buried and marked as a zero probability event.

Thu, 11/15/2012 - 12:07 | 2984278 cxl9
cxl9's picture

The entire business model of the U.S. Postal Service is an anachronistic absurdity. It is ridiculous to have a huge fleet of trucks driving around to nearly every home in America every day to deliver dead trees that almost no one needs or wants. The waste is staggering.

Instead of delivery, all mail should be scanned at the local post office and delivered electronically by email to the recipient. Most of the current employees can be let go. A few will be retained to feed mail into the scanners (and shredders). To address privacy concerns, the post office can use only employees for this task who do not read English, which shouldn't be too difficult to find given the state of the public education system and rampant illegal immigration. Mail order catalogs can be delivered to the post office electronically and then delivered to the recipients in email. No more driving tons of dead trees out to every home in America, burning precious fuel and money. The post office can charge for this service. Effectively they will become a spam relayer, which is what they are now anyway in the paper realm. If anyone still wants to receive their physical (paper) mail, they can be given the option of going into their local post office and picking it up. No more delivery. UPS and FedEx can handle the parcel deliveries. End of problem. There is nothing the post office does now that really needs to be done, or that someone else is not doing better.

Thu, 11/15/2012 - 12:13 | 2984295 catacl1sm
catacl1sm's picture

 

That's absolutely ridiculous. First, Why bother having USPS do scanning near the destination when when almost ALL of the mail created is done on computer. Just send by email to begin with. Second, not everyone has a computer or email.

Thu, 11/15/2012 - 12:17 | 2984312 Spastica Rex
Spastica Rex's picture

Not everyone has a mail box - so?

Thu, 11/15/2012 - 14:25 | 2984857 Thisson
Thisson's picture

It would be cheaper to buy computer/kindles/etc. for everyone who doesn't one than to continue operating the post office using physical delivery.

Thu, 11/15/2012 - 12:22 | 2984319 MachoMan
MachoMan's picture

Privacy fail.

How about an alternative...  You convert a big vacant warehouse and give everyone that wants to pay for one a post office box...  you have a few folks sort mail and stuff the corresponding boxes...  you also implement a spam filter whereby people can opt out of receiving spam mail, similar to the do not call list.  The sorters return spam to the sender for those folks who opt out.  If you don't want to receive paper versions of your monthly bills, etc. and have to go up to the post office to receive your mail, then go paperless (your provider probably has this option).  If you want something to actually come to your house, then you pay a different carrier to bring it.

Thu, 11/15/2012 - 12:55 | 2984452 pods
pods's picture

That is along the lines as to what I wrote about, and would actually comply with the mandate (maintain Post Offices).

There is nothing in the constitution for daily delivery to every household.  Nor should there be.

They could keep delivery to a house, but that would be a fee for service, and the fee would be based upon cost.

Of course, you could cut the vast majority of the employees in the postal service if you did that.

So it would never happen willingly.

pods

Thu, 11/15/2012 - 12:11 | 2984288 catacl1sm
catacl1sm's picture

We've been down this road before. Isn't the USPS hemorraging because of the requirement to pre-fund it's retirment accounts or something like that?

Thu, 11/15/2012 - 12:31 | 2984366 Roland99
Roland99's picture

Yes, the Republicans passed a bill requiring "pre-funding" 75 years' worth of pensions in only 10 years' time. That's what's dragging the USPS down.

 

Thu, 11/15/2012 - 12:38 | 2984401 strayaway
strayaway's picture

"the USPS is subject to a regulation forcing them to pre-pay retiree health benefits for 75 years in the future. This means that they are paying for health benefits for postal carriers who haven’t yet been born. The cost of this regulation (a regulation not required of any other government or private entity) was about 5.5 billion dollars in FY 2011 and was even higher in previous years."

The intent of this legislation is to dismantle this piece of our national infrastructure by imposing requirement that would bankrupt most corporations. There have also been raids on employee pensions going back to the Bush administration to help balance the federal budget. This is money that came out of employee paychecks and was specifically earmarked for pensions. Bush took so much out that the CBO said there was no longer enough to pay pensioners. Instead of the federal government replacing the stolen money, the postal service was required to up postage rates for the second year in a row to make up part of the loss. Customers were angry at the postal service for back to back increases.

 

Thu, 11/15/2012 - 15:12 | 2985091 DarkAgeAhead
DarkAgeAhead's picture

All of which makes my conspiracy theory the more likely...i.e, eliminate anything making it tougher for our political-military-industrial machine to achieve a totalitarian bliss.  If a communication can't be read by the computers and analysts by the NSA in Utah, then it shouldn't exist.  

Where else has Congress ever required a 75-year prepayment?

Thu, 11/15/2012 - 16:51 | 2985152 MachoMan
MachoMan's picture

herpa derp.

Congress postponed the mandatory pre-funding for FY ending in 2011...  and the postal service still had a $5.1b loss.  http://www.businessinsider.com/heres-how-the-post-office-lost-5-billion-...

That ~$5b + 2012's ~$6b amount was $~11.1b for 2012...  the USPS posted a $15.9b loss for FY ending in 2012.  http://www.nytimes.com/2012/11/16/us/politics/postal-service-reports-a-n...

So...  even accounting for this horrendous pre-funding requirement, the USPS is still leaking like the titanic.  Any more fairy tales?

Thu, 11/15/2012 - 12:15 | 2984307 UGrev
UGrev's picture

I only get junk mail from them.. I'm an ass hair away from just taking my mailbox down. All my shit comes by UPS or FedEx.  

Thu, 11/15/2012 - 14:31 | 2984867 akak
akak's picture

 

All my shit comes by UPS or FedEx. 

Which are absurdly expensive for packages compared to the USPS.

UPS and FedEx are fine for those occasional packages that need to get there ASAP --- but really now, how many times do you (or anyone) ship a package that MUST get to its recipient the next day, vs. three or four days with the USPS?

Far be it for me to defend a governmental agency (I think the postal service should be privatized), but as things stand today, using the USPS for shipping packages is a no-brainer.

Thu, 11/15/2012 - 14:43 | 2984952 Intoxicologist
Intoxicologist's picture

My grandfather was late for his own funeral - by two weeks - because FedEx lost his ashes.  My dad and I were the only ones, then, to be present to bury them since everyone had long gone home.  I asked my dad, "How do you know it's him? They could have just swept out the FedEx garage and put it in a box."  He looked at the box for a minute and said, "Well, they gave me a certificate..."

Thu, 11/15/2012 - 17:11 | 2985637 UGrev
UGrev's picture

oh come on now.  How many times have you heard of funeral homes doing shifty shit. You can't trust anyone, bro. 

Thu, 11/15/2012 - 17:10 | 2985629 UGrev
UGrev's picture

Currently, yes.. But imagine no USPS existed and the slack wento private copmanies, both existing and new. Can you imagine how much cheaper it would be ALL around? The death of USPS would bolster private endeavours, create an opening for ex-usps employees to move into and at the same time, cut back on the billions of dollars we throw away at the usps. Be done with it. 

Thu, 11/15/2012 - 12:21 | 2984313 LouisDega
LouisDega's picture

Will this effect the delivery of my Larry Flynt manuscripts?

Thu, 11/15/2012 - 12:28 | 2984349 Freewheelin Franklin
Freewheelin Franklin's picture

Without the USPS, how will I get my Silk Road deliveries?

Thu, 11/15/2012 - 12:44 | 2984417 HurricaneMoney
HurricaneMoney's picture

I currently work for the postal service, I am a clerk, not a letter carrier, and most of the current comments are correct to some degree. All the union wants to do is protect jobs

of people who are lazy or incompetent, and to change to keep up with the times is a big no no. Don't get me wrong, there are many devoted people who work for the Postal Service

who do care about customer service, but management only cares about meeting number goals. As people know the are over 50,000 post offices in many different areas of the country, and there is a one size fits all mentality with upper management. All post offices are given orders from the district on what to do, no matter what or how different there needs are. Anybody can be a supervisor or postmastet for the post service, they just take orders from the district Honcho and do it. They can't fire anyone, or do what is right at there area post office, according to there needs.

I do not belong to the union and am proud of it- I totally disagree with there socialist agenda. I am outsider and speak my mind. A lot of union people love to suck the union dick, and I tell them so. There is still free speech in this country I tell my fellow workers, but for how long I don't know. When Obama got reelected everyone was pratically having an orgasm. They don't care about the private sector getting crushed with obamas policies.

I tell them they are over paid for the work they do- Yes the postal service has great benefits, and pay compared to the private sector, I have had not a pay increase in over 5 years, and the cost of living increases were 0 the last 3 times - no inflation Ha Ha-

But I dont care if I ever got another pay increase, because the end doesn't justify the means to me. I would laugh my ass off if the postal service told all employees that they will no longer cover medical expenses and the option was obama care, I think they would think differently, Woops what was I thinking - They would blame everyone except the democrats, yes both parties are corrupt, but the post office people don't think so.

As long as the bailouts continue, and no ones salary and benefits change, nothing will change there thinking. Most of my fellow employees think the economy is getting better since Obama was reelected. Yes if you are a goverment employee (federal-state-local)

you won lifes job lottery, and you in the private sector- suck it up, and pay more taxes to keep the government gravy train going.

 

 

 

 

an

 

 

Thu, 11/15/2012 - 13:04 | 2984495 dark pools of soros
dark pools of soros's picture

You do realize that even if all the unions went away the higher ups will still say..  we are losing money, we can't compete in this environment, we have to cut back, etc etc even after they take all benefits away...it is a race to slavery and you foolishly think there is some utopia non-union plateau to live happily ever after

 

Just remember, if they ever offer you profit sharing, that will be the last quarter they ever show a profit on the books.

 

Stay a fool 

 

Thu, 11/15/2012 - 12:56 | 2984453 dark pools of soros
dark pools of soros's picture

let them raise rates and deliver two less days a week..  problem solved

 

 

Thu, 11/15/2012 - 12:58 | 2984466 sitenine
sitenine's picture

Oh, surprise...not.

What might surprise you (maybe not), is that the only 'govt' employees to receive a raise this year are postal employees.  Thank you unions.

Thu, 11/15/2012 - 13:01 | 2984468 Drunken Monkey
Drunken Monkey's picture

The system needs more feedback to effect the necessary corrections.

Join me in "the junk mail project", a new use for your paper shredder.

When you get junk that includes a postage paid reply envelope run everything except that envelope through your shredder, stuff the fluff in the p.p. envelope, seal it, and stick it in the mail box.

When you get other kids with no p.p. envelope shred everything, stick it all in a new unaddressed envelope, and mail that (no stamp).

If we each are willing to cover the cost of a bit of our time, and a box or 2 of blank envelopes we can reset this broken business model.

Thu, 11/15/2012 - 13:04 | 2984494 CvlDobd
Thu, 11/15/2012 - 13:10 | 2984526 jtlien
jtlien's picture

I think postal delivery is a fine job for a teenager.  Like delivering papers.   I think it is crazy to make this a career/pension kind of a job.   My thought was always to deliver most mail to schools and have the kids bring it home in their napsacks.  Today most communication goes through internet.   Junk mail mostly through the mail.  But the government needs to track us so they know were to send the tax forms.   By the way, Lysander Spooner invented the US penny post NOT the government.  He may be rolling over in his grave knowing that 600,000 adults are delivering junk mail for a living.

 

Thu, 11/15/2012 - 13:23 | 2984591 yogibear
yogibear's picture

Remamber Bernanke and the Federal Reserve has set out to save the world. They can save the post office by buying their deb. They can also buy all the expanding state debt from pensions.

We can make the Federal Reserve's balance sheet look like the Ponzi it is. Expand it by 10's of trillions. More and more and more debt.

 

Thu, 11/15/2012 - 13:33 | 2984642 Rearranging Dec...
Rearranging Deckchairs's picture

I weep for America's collective math scores!.

250 million times 365 days doesn't equal 15 Billion. Its more like 91 Billion. 250 million times 312 days (6 days a week admittedly not deducting for holidays) is about 78 Billion. Even if the 15 Billion dollar loss is quarterly the math doesn't square up.

 

Thu, 11/15/2012 - 14:02 | 2984762 monad
monad's picture

The USPS fired the guy who made USPS Air Delivery turn a profit. Non servium, leechez

Thu, 11/15/2012 - 14:46 | 2984964 Windemup
Windemup's picture

One way to fix this is to have that little cyber war that the CIA is planning. With the lights turned off in net-land, the pony express would become viable once again.

 

Thu, 11/15/2012 - 15:00 | 2985038 Forbes
Forbes's picture

Do these idiots running the Postal SERVICE know what business they're in? Umm, the post office was closed on Monday November 12. What retail, customer service business was closed on Monday? FedEx and UPS are eating their lunch.

Cost of delivery higher than 50 cents--are you kidding me? In my Manhattan hi-rise, the "letter carrier" sits in our lobby for two hours--talking on her cell phone, chatting up the doorman--after she's finished, before returning to her P.O. station to check-out.

USPS lost $15.9 billion, with 600,000 employees--that's $26,500 per employee taxpayer subsidy. It's a massive jobs program. It's rampantly unproductive. The world has changed, the post office might try changing with it.

Thu, 11/15/2012 - 15:03 | 2985039 Forbes
Forbes's picture

Do these idiots running the Postal SERVICE know what business they're in? Umm, the post office was closed on Monday November 12. What retail, customer service business was closed on Monday? FedEx and UPS are eating their lunch.

Cost of delivery higher than 50 cents--are you kidding me? In my Manhattan hi-rise, the "letter carrier" sits in our lobby for two hours--talking on her cell phone, chatting up the doorman--after she's finished, before returning to her P.O. station to check-out.

USPS lost $15.9 billion, with 600,000 employees--that's $26,500 per employee taxpayer subsidy. It's a massive jobs program. It's rampantly unproductive. The world has changed, the post office might try changing with it.

Thu, 11/15/2012 - 16:10 | 2985363 toomanyfakecons...
toomanyfakeconservatives's picture

Up with carrier pigeons!

Thu, 11/15/2012 - 17:12 | 2985641 WallStreetRanter
WallStreetRanter's picture

Title is a little misleading. While the postal service uses 250 Million a day, it is not "costing" tax payers that much. Looking at the loss of 15.9 Billion would be a loss of 43.5million a day....yes still not good lol....

Wall Street Ranter

Thu, 11/15/2012 - 17:25 | 2985703 HurricaneMoney
HurricaneMoney's picture

I work at the USPS - The employees are brainwashed by the union-but the union will say I am brainwashed by management.

Listening to union people talk- My life would be miserable without them, bullsh-t. My life is what I make of it. I saw this coming

years ago, but nobody beleived me. The unions preach everyone must pay there fair share of taxes when taxes go up. But amazenly they are tax exempt. how conveinent. They bitch about the overfunding of the health and retirement programs which is causing the Postal Service Demise. No it's not. It's employees who don't care, and the money they make is owed to them because they breathe, They long for the days where they can get there job done in 4 hours and goof off the rest of the day.

How much talent does it take to put a letter in a mailbox, and make 60,000 to over 100,000 dollars a year with overtime. This

country is going to hell because of the republicans they will tell you. Even though the democrats control the presidency, and the senate, but but but the republicans control the house is what they will tell you-  so it's all there fault,

I know dems and repubs are both to blame , and corrupt but don't tell that to the mailman or your check you are expecting will get lost in the mail,

Fri, 11/16/2012 - 03:43 | 2986926 TheObsoleteMan
TheObsoleteMan's picture

The fault is this: You can not have a employee benefit package that is much more generous than most of the people that use the service have! The math will never work. These people are not post high school educated, there is no sane reason for them to be bringing down the salary and benefits that they are. They perform, "monkey see, monkey do" work. It doesn't require any special skill or expertise. It is $8 to $10 an hour work, not much different than fast food. It is the retirees of the USPS that is bringing down the system more than anything. That which can't be maintained, will not, regardless of the efforts of CONgress. The model is at least thirty years outdated. Do you know of any other business that could survive operating like that? I don't.

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