A Modest Proposal To Save The Postal Service: Hyperinflation

Tyler Durden's picture

"The financial problems of the Postal Service are getting bigger every year," is how US Postmaster General Donahoe tried to convinced Congress not to block the bill the end Saturday delivery of mail. Raising the specter of mutually assured destructive bailouts in the future, the CEO rattle lawmakers (and other stakeholders) as NBC News reports, Representative Darrell Issa noting "It's very clear that ultimately, either the rate payer or the taxpayer will have to pay the $20 billion in debt of the Postal Service."

Indeed Mr. Issa - so by our reckoning the plan to tax emails was a non-starter and so we compare the 73.5 billion pieces of mail handled by the USPS and the $20bn budgetary gap, it would appear the answer is simple - the current 46c stamp will have to rise in value by 27c or 60% in order to meet the shortfall.

The problem of course is the legal limit on increasing stamp prices is bounded by what the BLS' official annual inflation report is, and which as the Fed is happy to reminds us, is at best 2% per year. Luckily, every problem, in this case too little inflation, has a solution: in this case hyperinflation.

The simple money creation by increasing the nominal value of the stamp is by now a well-trodden path of inflating away your problems that our central bankers have taught us - or else the 10s of billion forced into pension funds might just have to be tempered. So much for Valentine's Day at a cost of 72c per stamp.

Of course, absent hyperinflation and the needed 60% price inflator to avoid a taxpayer funded bailout, all we may need are some hedonic adjustments for the utility of  stamp to justify the cost...

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SeverinSlade's picture

Problem is the more USPS raises its rates, the more people and businesses will turn to alternative delivery methods, crushing their volume (and increasing the need for even higher rates).

idea_hamster's picture

How about printing a $1 trillion "Über-Awesome Delivery" stamp, selling it to the Fed, and pasting it on the envelope that they use to send Treasury the annual Fed surplus?

Problem solved!

</ OMG teh stupid!  It BURNS us, precious!>

diogeneslaertius's picture

Brewster's Quadrillions

 

dibs on the screenplay

Say What Again's picture

I'm looking for the e-mail address for US Postmaster General Donahoe & Mr Issa.

idea_hamster's picture

Postmaster only has snail mail, dude -- no sleeping with the enemy!

TheFourthStooge-ing's picture

One wonders if the Tyler responsible for the recent slew of articles about the Post Office will ever acknowledge the role of the Postal Accountability and Enhancement Act of 2006 has had on Post Office deficits.

After all, if they didn't need to prefund retiree benefits 75 years into the future, they might actually be turning a profit.

pashley1411's picture

I can understand your dismay that, while the accounting and unfunded liabilities of the other government agencies are a stinking pile of manure, the USPS is actually made to account for some (but not all) of its pension obligations.  

Might feel better about this when the other shoe drops, and former government workers are staking out grocery story disposal bins. 

RSBriggs's picture

It doesn't matter - the USPS pension money just goes into the general fund, like everything else (i.e the so-called Social Security trust fund...).  Congress doesn't want to let it go - it's one of the biggest "off the books" cash cows they have.

SafelyGraze's picture

if everyone would kindly send some bricks, sans postage, to 

chairman
marriner eccles bldg
20th and constitution (!) nw
w dc

the postage due, when paid by your fed, would amount to billions

hope this helps,

B Franklin

 

 

FEDbuster's picture

The USPS has taken over the issuing of passports, maybe they can expand into medical marijuana?  This would help balance the books, making sure the sales taxes got kicked up to state and feds and increase traffic.  They gave the Indians casino gambling to save their asses, let's give the postal service dope dealing to save their ass.  There is already a shit load of prescription meds delivered by the USPS, so they have experience.

LooseLee's picture

True, so why isn't the private secor doing the same?

Al Gorerhythm's picture

Government seems to bring out the best in every "enterprise" they manage. Their success rate is extra-ordinary. 3 thousand years of recorded managerial success contained in a book 1 page thick. Hope and Change. Winning!

fourchan's picture

is there a long forever stamp etf? lol

camaro68ss's picture

Hyperinflation fixes everything, until it fixes nothing, - Camaro68ss

Stackers's picture

Tyler hit the nail on the head. Has anyone done the hedonic adjustment for the self sticking stamp ? You know how much I used to hate licking stamps ? a lot. and sometimes even alot.

Tango in the Blight's picture

The former has the e-mail address pmgceo@usps.gov

But if you send an e-mail to that address it will probably be transcribed by an office clerk using a quill on parchment, then sealed with lacquer and finally sent to him by carrier pigeon.

As for the latter:

http://issa.house.gov/contact/contact-me

Midas's picture

Tyler-

The 73.5 billion pieces you used in your calculation is first class mail only.  You need to include standard mail also, it takes the total to 160 billion and will make the figures much different.

http://about.usps.com/who-we-are/postal-facts/welcome.htm#H2

The PostMasterGeneral likes to make things look as bad as possible, so he mentions the only area of postal business that is declining.  Don't buy the hype.

 

The link also shows other insights:  The revenue is the same as 2002, but they are doing it with 200,000 fewer employees.

 

OpenThePodBayDoorHAL's picture

Funny how the chart zooms upwards right about 1971...

zelator's picture

Well, let's see...  two words. One begins with N and the other G

Ignatius's picture

"The PostMasterGeneral likes to make things look as bad as possible..."

Right.

This fuck was put in place to tear the USPS down.  Same old corporate trick to privatize, bury and absorb the commons.

Mail is cheaper today than the 60s when measured in gold.

JeffB's picture

Look at the "Total Customer Visits". It had been declining from a high of about 1.3B visits/year until 2011 when it exploded(?) to 935.7B ?

Or are they just not good with numbers and letters and things?


LooseLee's picture

And how many 'Dumber than a Rock' administrators?

Al Gorerhythm's picture

"How about printing a $1 trillion "Über-Awesome Delivery" stamp," ... or money substitute.

I like it. Then we could all just save those trillions and we'll all be rich, as long as we follow the "10 Immutable Laws of Money", save as much as we can and live a frugal existence, whiskey will flow in the creeks of Candy Mountain once again, and again and again.

http://thedailybell.com/28692/Shock-Powerful-British-Money-Man-Calls-for...

Silver Bug's picture

Just one more example of the government lieing about the true inflation rate. Does anyone believe their bogus numbers anymore? I hope not.

 

http://jimroger.blogspot.ca/

CheapBastard's picture

The REAL inflation rate seems to be crushing seniors savings accounts (and seniors along with it). Oddly, I never see AARP harping about that.

To bad the seniors don't have a lobby like the NAR. They'd be in better shape if they did.

Freddie's picture

Hope & Change.  Everything in O-Drone-O's turd world Ameri-Afrika is going full retard. 

847328_3527's picture

I personally know two small businesses that are going under due to the rate increase. May not seem like alot to some people however, many businesses (like these) work on paper thin margins of about 1 to 1.2% so this 2.5% domestic and over 6% international increase will knock them out, thus eliminating two more of the fast disappearing "Middle Class" (aka, 21st cenutry Dinosaur).

 

Seems to create moar jobs and stim-U-late the economy we might want to: 1) increase P.O. efficiency (aka cutting off dead meat); and, then 2) cut the rates to stimulate sales.

Freewheelin Franklin's picture

Problem is the more USPS raises its rates, the more people and businesses will turn to alternative delivery methods,

 

It is illegal for an individual or business to operate a mail delivery service except for "emergency" (read: overnight, 2nd day air, courier) circumstances.

magpie's picture

I now feel less an idiot for pumping the forever stamp trade

catacl1sm's picture

Me too. Seems like a sure winner... eventually.

Dr. Richard Head's picture

I love to see how subsidized "businesses" work....or don't for that matter.

LooseLee's picture

Just have a look at Warren Buffet's portfolio...

davidsmith's picture

No, the "problem" is that they're trying a land grab on the post offices by forcing USPS,alone among government agencies, to up front its pension liabilities.  That makes the situation LOOK bad, so that means they have to lay off people and SELL POST OFFICES.

 

Gee what's that about?  It's about the loathesome Dianne Feinstein and her thieving husband, Blum, who just happens to be CEO of Coldwell Banker, which just happens to be the agent for sale of post offices.  That's what's going on with the post offices.  Didn't you know?

diogeneslaertius's picture

good points

"land grab" is a perfect characterization

they are seizing a vast remaining territory of the papers and effects end of our reality here and by the time people realize what actually happened we will be the UK

 

meanwhile revolving door circle jerk means big fat paychecks

 

not so hard to imagine how Feinstein got so rich, conspiring to defraud people while stealing sovereignty as well

 

 

WTF_247's picture

I don't view that as a problem.  The actual problem is the remainder of the govt ignores its unfunded liabilities.

The bottom line is we will witness in the next few years what happens when you promise things that cannot be paid.  The post office is not the only game in town on this track.  The public will only put up with it for so long (higher rates, higher taxes) before they realize that 100% of the game is just to pay off stupid bets made by prior generations of politicians.

When there is no real money at stake the sky is the limit on promises.  What the employees (and former employees) do not realize is that even the govt will reach a point where there is no money to pay for it.  You could raise stamps to .75 - the public will balk at it when they find out the only reason is to cover unfunded (and stupidly pledged) liabilities for retirement and healthcare costs.

Other public employees have the same fate coming - its just further down the road.  Why do you think almost all corporations stopped pensions 30+ years ago - they did the math and it is impossible to fund at some point.  Unlike the govt, they cannot just print money out of nothing nor raise taxes and fees to pay for it.  So they stopped.  The govt has not learned its lesson yet.

aerojet's picture

A lot of companies I am familiar with only killed their pensions in the last 10 years.

Lord Koos's picture

What 2006 act was about, was the front edge of a ploy to privatize the postal service.  If they can keep bitching about how the post office is "a failure" maybe the disaster capitalism plan of looting the USPS has a chance.

Bunga Bunga's picture

After the Fed is the US mail joining the printing club? Just print stamps and pay employees with that, problem solved.

diogeneslaertius's picture

shades of WW2 there sir and chillingly prescient

tickhound's picture

No kidding.  It's do or say whatever it takes to keep the lights on at this point... with EVeryfuckinthing.

diogeneslaertius's picture

they did the same to UK's mail and for the same reasons, worse for them really, the post office was a bit of a corner store and pub in many places in airstrip one

 

total surveillance and the best part will be the legal loophole, if a private multinational firm agrees to comply with a constitutional violation it will be protected under their choice and you will be stuck with no other options due to a logistical monopoly

 

bust out the fucking horses baby its pony express time

oh wait, its in your lasagna

soylent privacy is sheeple

dmger14's picture

Gee, what happened around 1970 that suddenly caused the price of stamps to soar (scratching head)?

modest_proposal's picture

dmger is either very new here, or has a devastatingly effecitve deadpan delivery.

waterwitch's picture

Bring out your drones.

optimator's picture

You're on to something.  Have those sophisicated drones deliver the mail (and bump off anyone that gets mail they don't like.

Totentänzerlied's picture

" either the rate payer or the taxpayer will have to pay the $20 billion in debt of the Postal Service."

Not if you SHUT THE STUPID FUCKING MONOPOLY DOWN - it never should have existed in the first place, goddamn morons. PS: That means totally deregulating all mail delivery ... or else FedEx and UPS essentially maintain their private GOVERNMENT ENFORCED cartel (goddamn morons).