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US Postal Service Bailout Imminent?

Tyler Durden's picture




 

It has long been known that the United States Postal Service, in its current money-losing format, is unsustainable. The media has reported in the past that in order for this bloated government anachronism to be remotely competitive in the age of email and FedEx, it would need to cut hundreds of thousands of its workers. Even the USPS, via its largest union, the National Association of Letter Carriers, has admitted that the organization will need to undergo "tough sacrifices" although as the WSJ noted, "It didn't specify what concessions it would seek from members." And this is where it gets fun: because "just the tip", or even just talking about the tip, apparently is more than labor unions in this country can stomach. Enter Ron Bloom, Lazard, and the very same crew that ended up getting a taxpayer funded bailout for GM. From the WSJ: "The Postal Service's proposal to close thousands of post offices and cut back on the number of days that mail is delivered "won't work" and would accelerate the agency's decline, according to the six-page report by Ron Bloom, President Barack Obama's former auto czar, and investment bank Lazard Ltd., LAZ who were hired by the union in October." That's right: after all the huffing and puffing about "sacrifice" and austerity, the labor union took one long look at the only option... and asked what other option is there.

"Instead, the report says, the agency should raise its stamp prices, which are among the lowest in the world, and find new ways to profit more from its built-in advantage as the only entity to reach every American home every day." Well that... And the internet. "It should also replace its multi-layered governance system with a corporate- style board of directors whose members have entrepreneurial experience." Translation - let's just continue doing what we do, but kill demand for our services even more, because it is not the massively bloated expense side of the ledger that is the issue, it is how much the USPS charges. And apparently in mailman econo-logic, increasing prices leads to increasing demand, all else equal. At least this bailout plan came in 6 pages, as opposed to the 3-page one penned by Hank Paulson. Yet the kicker is that the "other option" is well-known: taxpayers get to fund another wholesale bailout of yet another worthless, ineffective government organization. But hey: there are hundreds of thousands of labor union votes, pardon, jobs to be saved. And with elections just 6 months ahead, is there any doubt what will happen?

More from the WSJ:

The proposals are the opening salvo in what is expected to be a long series of negotiations as pressure mounts on Congress to approve legislation to restructure the Postal Service, which has said it is in danger of becoming insolvent without changes to its business model.

 

The union's plan is one of several competing proposals—including the Postal Service's and bills in Congress—that are promoting rescue ideas, and it illustrates the deepening divide over how to remake the 236-year-old institution for modern times.

And the shocker:

Labor groups, for instance, generally oppose cuts to service. The mailing industry opposes higher postage fees. Many legislators say the Postal Service needs to close facilities—but not in their district. And a Republican-led bill set to be heard by the full House looks askance at any proposal that would allow the Postal Service to compete with private industry. That bill's backers say the agency should act like a business—to a point. "Reducing excess capacity and adapting delivery to America's changing use of mail is exactly what any business would do as technology changes the market," said Ali Ahmad, a spokesman for the House Oversight and Government Reform Committee.

In other words, "fix it", just don't make me lose anything in the process... or work harder of course. In the meantime...

The Postal Service is facing historic losses—more than $5 billion in its most recent fiscal year—that it attributes to a shift in communication habits in the digital age and to an unusual requirement imposed by Congress in 2006 that it fund retiree benefits decades ahead.

Ironically Ron Bloom is spot on. It is unclear however, if his statement was tongue in cheek:

The union concedes that some "shrinkage" in the system is necessary, Mr. Bloom said, but he added that the Postal Service's cuts will result in more revenue losses than savings.

 

He compared the Postal Service's strategy to General Motors Co. before its restructuring. "Their strategy was to lose slowly, to shrink to survive," he said.

Where Ron stopped short is that going from before to after restructuring involved billions in taxpayer cash. Yet unlike a just as bloated Chevy Volt post-reorg maker (not yet retrofitted with excess inventory Solyndra solar panels), at least the USPS can not stuff excess mail inventory in mail boxes. What it certainly can, however, is demand billions from taxpayers. Because, you know, if we just hope enough, things will change.

 

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Wed, 04/18/2012 - 17:00 | 2356063 misterc
misterc's picture

It began as a mistake.

It was Christmas season and I learned from the drunk up on the hill, who did the trick every Christmas, that they would hire damned near anybody, and so I went and the next thing I knew I had this leather sack on my back and was hiking around at my leisure. What a job, I thought. Soft!

(Excerpt from Charles Bukowski's Post Office)

Wed, 04/18/2012 - 17:06 | 2356085 machineh
Wed, 04/18/2012 - 17:24 | 2356168 I think I need ...
I think I need to buy a gun's picture

i don't know what i'll do just today i got a UPAK and victoria secret catalog, I also got an advertisement from ford on how much gas and money i'll save if i go buy an f-150 tomorrow

Wed, 04/18/2012 - 17:35 | 2356225 YC2
YC2's picture

I get a coupon catalog in spanish and an overdraft notice for a former resident every single day of the week.

Also, Ive seen statistics that 50% of food is thrown out in america.

I feel like for those who are not as wasteful, a reduction in "standard of living" might not hurt so much, depending on what parts are cut out. 

Wed, 04/18/2012 - 17:39 | 2356244 YC2
YC2's picture

Also, many would be surprised at the amount of business that the govt does with FedEx, UPS, and DHL.  Or not. 

Wed, 04/18/2012 - 17:51 | 2356280 CH1
Wed, 04/18/2012 - 18:23 | 2356385 Cdad
Cdad's picture

Ron Bloom is literally a boil on the ass of America.  Get this clown out of DC...and quickly so.

Wed, 04/18/2012 - 18:44 | 2356420 The Alarmist
The Alarmist's picture

That picture is vaguely reminiscent of the Monty Python Twit Olympics, which actually is a grand parody of the United States Congress circa 2012.

The shame of the matter is that the Post is Constitutionally mandated, and actually rather easy to run as a business, and they can't get that right.  So we are supposed to have faith that they get right the other 99% of Federal spending on quasi- and un-Constitutional and nebulous at best in terms of a business proposition?

 

Wed, 04/18/2012 - 20:33 | 2356767 Isotope
Isotope's picture

No, it's not mandated. The constitution gives congress the power to create and maintain a postal service and post roads, it doesn't require that they do it.

Wed, 04/18/2012 - 21:30 | 2356871 A Nanny Moose
A Nanny Moose's picture

"Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds."

Mother nature ain't got near the same power as few missed paychecks.

Thu, 04/19/2012 - 00:20 | 2357255 FEDbuster
FEDbuster's picture

Just think how bad off other govt. agencies, unions and businesses would be, if it were mandated that they fully fund penisions and retiree heathcare benefits.  Not defending the post office or their unions, but come on no one else is funding the future Ponzi.

Thu, 04/19/2012 - 02:38 | 2357413 AldousHuxley
AldousHuxley's picture

PAEA
law passed in 2006 requires prepayment to fund for health benefits for
future retirees. 10 year plan 2007-2016. About $5.5 Billion required
each year. This is a manufactured crisis via a poison pill. The current
$44 Billion in fund has enough to pay benefits for 20 years.

 

USPS made $9.5 Billion profit from 2003-2006

 

It is just politicians getting their hands on the money just like 401k, pension, social security scam to spend it now, pass the buck to the next guy later.

 

 

 

 

Wed, 04/18/2012 - 19:01 | 2356479 LasVegasDave
LasVegasDave's picture

Why not just give the country to those cocksuckers?

Only way govt stops growing is firepower directed on the target

Wed, 04/18/2012 - 21:18 | 2356899 taxpayer102
taxpayer102's picture

 

 

Ron Bloom is a sellout, picked by investment bankers to setup the USPS for a "bailout" conditional on it being taken over by wall street thieves.

Thu, 04/19/2012 - 00:27 | 2357206 salvadordaly
salvadordaly's picture

In reply to CH1

I will spare you the click,,,

 American Letter Mail Company

Being an advocate of self-employment and opponent of government regulation of business, Spooner started his own business called American Letter Mail Company which competed with the U.S. Post Office. Postal rates were notoriously high in the 1840s,[7] and in 1844, Spooner founded the American Letter Mail Company, which had offices in various cities, including Baltimore, Philadelphia, and New York.[8] Stamps could be purchased and then attached to letters which could be sent to any of its offices. From here agents were dispatched who traveled on railroads and steamboats, and carried the letters in hand bags. Letters were transferred to messengers in the cities along the routes who then delivered the letters to the addressees. This was a challenge to the United States Post Office's monopoly.[7][9] As he had done when challenging the rules of the Massachusetts bar, he published a pamphlet titled "The Unconstitutionality of the Laws of Congress Prohibiting Private Mails." Although Spooner had finally found commercial success with his mail company, legal challenges by the government eventually exhausted his financial resources. He closed up shop without ever having had the opportunity to fully litigate his constitutional claims.[citation needed] The lasting legacy of Spooner's challenge to the postal service was the 3-cent stamp, adopted in response to the competition his company provided.[10]

Wed, 04/18/2012 - 19:52 | 2356662 valley chick
valley chick's picture

Many folks would be surprised on how many UPS, FED EX, DHL packages are brought to the post office for the Post Office to deliver.  Thats right...not all packages are delivered by the other companies so drop them off at the local post office for the postal carriers to deliver.  So be careful what you wish for. 

Wed, 04/18/2012 - 20:32 | 2356766 aerojet
aerojet's picture

That's a relatively recent development--an attempt to keep postal employees delivering something.  I'm sure the private carriers would adapt if USPS cuts back.

Wed, 04/18/2012 - 20:46 | 2356799 valley chick
valley chick's picture

no...it is by contract.  Many are not familiar with the contract.  Cost effective for the other courier services. Don't think for one minute that the other courier services would not raise their fees if they did not the contract with the USPS. 

Thu, 04/19/2012 - 02:19 | 2357394 AldousHuxley
AldousHuxley's picture

that's because USPS delivers where it is unprofitable for forprofit couriers as your right.

But most people live near cities and this is just subsidy to red state rednecks living in middle of nowhere needing taxpayers to subsidize them.

Wed, 04/18/2012 - 21:37 | 2356932 valley chick
valley chick's picture

Wow ..3 down arrows on fact.  Reality check.

Thu, 04/19/2012 - 17:26 | 2359616 mkkby
mkkby's picture

Raise the price of stamps until there's no more junk in my box.

Only deliver every other day.  What difference does it make if I get my electric bill on Monday or Tuesday?  I'm not gonna pay it until the 1st anyway.

Thu, 04/19/2012 - 06:59 | 2357613 onthesquare
onthesquare's picture

the only mail I want starts off with  "Pay to the Order of..."

Wed, 04/18/2012 - 17:06 | 2356092 The trend is yo...
The trend is your friend's picture

This is terrible news.  I won't get my bills on time or all thise great credit card offers.

Wed, 04/18/2012 - 17:14 | 2356129 SHEEPFUKKER
SHEEPFUKKER's picture

Who will deliver their unemployment checks? 

Wed, 04/18/2012 - 17:20 | 2356159 The trend is yo...
The trend is your friend's picture

The postman always rings twice......Here"s Johnny

Wed, 04/18/2012 - 18:45 | 2356424 The Alarmist
The Alarmist's picture

I thought it was all direct deposit now.

Wed, 04/18/2012 - 20:35 | 2356769 aerojet
aerojet's picture

If it's anything like tax refunds and now SS money, the Internet will do it--faster, cheaper, and safer.

Wed, 04/18/2012 - 17:08 | 2356100 Ag1761
Ag1761's picture

Hey Tyler, where did you get the mail man uniform, love you in that picture :-)

Wed, 04/18/2012 - 17:20 | 2356151 PY-129-20
PY-129-20's picture

Yes, but remember they had great postal carriers - like Newman or Cliff Clavin.

Wed, 04/18/2012 - 17:01 | 2356065 slewie the pi-rat
slewie the pi-rat's picture

the check is in the unionMail

Wed, 04/18/2012 - 17:02 | 2356069 HamyWanger
HamyWanger's picture

What you are lobbying for ZH, the USPS closing shop???

You may be fortunate enough to have a computer with Internet and be able to pay FedEx fees, but not all Americans are the same. The regulated tariffs of the USPS are a blessing for many. 

Wed, 04/18/2012 - 17:14 | 2356125 xela2200
xela2200's picture

You can access the internet for free at most libraries. All I get in the mail now a days is junk. All bills and statements are either sent to my email or accessible through the bank's site. Maybe, we could use the money wasted in snail mail to provide a free national wifi zone.

Wed, 04/18/2012 - 17:14 | 2356131 Midas
Midas's picture

Uh, are libraries free?  Cause there was something about them on my last tax bill....

Wed, 04/18/2012 - 19:15 | 2356544 max2205
max2205's picture

New rumor: USPS to be folded under TSA

TSA isn't a profit center and how better to keep track of all of us

Wed, 04/18/2012 - 19:55 | 2356672 DCFusor
DCFusor's picture

Nearest library to me that has internet is 24 miles away.  Kind of far to walk.  And gas to get there is more expensive than a stamp.  But the PO on a rural route comes to me, sells me stamps, picks up mail and so on.  They are pretty hard to live without in rural areas, and UPS and Fedex often come late as they don't want to come all the way out here for just one package, so they wait till they have a few.

Their problem is they give super low rates to bulk mail, which is most of what they carry these days, and of course, the bad managment and the big union.  They'd be doing most of us a huge favor by jacking up bulk mail rates, frankly.  On the other hand, that snail spam gives great heat from the woodstove in winter.

Wed, 04/18/2012 - 17:33 | 2356215 LeBalance
LeBalance's picture

oooooh let's just take all POSITIVE CONTRACTS into illusion LECTRO land.

o

m

f

g

 

and if you did not get it xela.

fuck you.

your horse.

your mom's horse.

and your mom's horse's fleas.

Wed, 04/18/2012 - 18:04 | 2356323 xela2200
xela2200's picture

Well thought argument. It shows your mental capacity. Don't strain yourself now.

Thu, 04/19/2012 - 00:09 | 2357238 Demologos
Demologos's picture

You mean the libraries that have not been sold off to for-profit companies?  The new "private library" will charge a hefty premium for using their computers and spy on everything you do to boot!

Wed, 04/18/2012 - 17:15 | 2356130 CrockettAlmanac.com
CrockettAlmanac.com's picture

Maybe you are fortunate enough to be able to overpay for services which could be more efficiently provided in a competitive market but not all Americans can afford to throw money away like that. Times are tough.

Wed, 04/18/2012 - 20:25 | 2356747 nmewn
nmewn's picture

I envision a giant mail drop in town for the rural, pick it up when you go for groceries...no more random carbon footprints thrown into the atmosphere six days a week for personalized delivery systems. No more ruts running off the sides of roads scarring nature. And no more M80's in the mailbox at graduation or Halloween...lol.

Central planning, its the most cost effective & green thing to do ;-)

Thu, 04/19/2012 - 07:06 | 2357617 onthesquare
onthesquare's picture

Take a lesson from Hooterville and early America.

Wed, 04/18/2012 - 17:27 | 2356194 narnia
narnia's picture

It's Constitutional for the federal government to operate the post office, but that doesn't mean the federal government must or even should operate the post office.

Wed, 04/18/2012 - 17:27 | 2356200 NotApplicable
NotApplicable's picture

Hey everybody, it's Hamy-time!

 

Wed, 04/18/2012 - 17:40 | 2356243 duo
duo's picture

do you really think if only FedEx and UPS were left, they could deliver a #10 envelope (business) across the country for $0.50?  It would at least be $2.

Wed, 04/18/2012 - 18:21 | 2356381 NotApplicable
NotApplicable's picture

Guess what? The USPS can't do it either! Otherwise they wouldn't need constant bailouts.

Why is this so hard to understand?

Wed, 04/18/2012 - 20:28 | 2356753 Freddie
Freddie's picture

ZH is still filled with a lot of f**ks who voted for the islamic.

Wed, 04/18/2012 - 22:45 | 2357059 stocktivity
stocktivity's picture

Show me one 'constant bailout" the postal service got in the past.

Thu, 04/19/2012 - 00:35 | 2357259 Demologos
Demologos's picture

Stocktivity is the only one who seems to not have a conservative talking point to grind, including the Tylers.  The USPS has been completely independent of the federal budget for a long time.  The problem is that they can only raise the price of stamps in relation to the "official" inflation rate.  Of course, we all should know that the "official" inflation rate is a lie perpetrated to stiff the Social Security fund for what should be much higher COLAs.  That is why the amount people get from their Social Security payout is so paltry.

Remember, that the "official" inflation rate does not  include fuel prices.  When the price of fuel for the post office trucks and the jets flying airmail goes up, the USPS can't adjust the stamp prices to make up for it.  They just have to hope the fuel costs eventually go down.  Meanwhile, service suffers.  It has to come from somewhere.

The capper is that the Bush Congress passed a law forcing the USPS to fund the pension system fully for 75 years into the future.  That's right, by 2016 it has to be funded for people who have not been born yet that might be postal employees.  What other corporation, company or business has to do that?  This stunt was done to intentionally kill the post office.  And yes, FedEx and UPS will jack up their rates five minutes after the post office closes their doors.

Thu, 04/19/2012 - 01:03 | 2357321 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

How many USPS retirees are getting two retirement checks. The first one from a branch of the military and the other from the USPS? How about the workers at the USPS simply get their contibution from SS only? Since the USPS is essentially a branch of the government who has always gotten free money from the feds, why the need for a seperate reitree benefit.

If the UPS can compete with the market then the employees could have a 401k just like UPS and Fed Ex? If anyone says they are not a branch of the government how much previous federal employment is used to calculate test scores, vacation, and sick leave?

Wed, 04/18/2012 - 19:17 | 2356542 NidStyles
NidStyles's picture

Better to pay up front rather than through inflationary taxation.

Thu, 04/19/2012 - 07:08 | 2357623 onthesquare
onthesquare's picture

One way to pay up front would be to remove those warnings about not sending cash through the mail

Wed, 04/18/2012 - 20:06 | 2356710 valley chick
valley chick's picture

Exactly.   It would be hard pressed to find any of the existing other companies wanting to get involved with letter mail for they know that there isn't any profits at the existing rates.

Wed, 04/18/2012 - 20:36 | 2356774 aerojet
aerojet's picture

Regulated tariffs, sheesh!  They should charge what the market will bear.  And they do seem to be like buggy whip manufacturers at the dawn of the automobile.

Wed, 04/18/2012 - 17:03 | 2356070 knukles
knukles's picture

Ron Bloom?
Oh sweet heaven beeJesus, I think my prostate just ruptured.

Just fucking in time for another "save" for the Unions Prior to the Elections.

That's awfully cynical, Knukles

Wed, 04/18/2012 - 17:47 | 2356263 Goldilocks
Goldilocks's picture

Family Guy - Prostate Exam
http://www.youtube.com/watch?v=xHKTE75dgE4 (1:09)

Wed, 04/18/2012 - 17:02 | 2356072 WTFx10
WTFx10's picture

Once the easy listening post comes online for the Goobermint. Snail Mail will be relevent again. Unless they inovate a way to read folded letters.

Wed, 04/18/2012 - 17:08 | 2356104 blunderdog
blunderdog's picture

That's a joke, right? 

Shit, I learned how to read mail in sealed envelopes before I was outta middle school.

Wed, 04/18/2012 - 18:48 | 2356437 The Alarmist
The Alarmist's picture

You miss the point ... they would need actual, literate human beings to read snail-mail, especially since everyone's handwriting has gone to shit in this digital, typing-oriented age.

Along with using cash to pay for your coffee, a return to hand-written correspondence is one of those tiny acts of civil disobediance that could actually bring TPTB to their knees.  Whodathunkthat?

Thu, 04/19/2012 - 10:13 | 2358125 blunderdog
blunderdog's picture

1) No they wouldn't.  Text can easily be read electronically.
2) It's very unlikely people would start writing by hand.
3) None of your correspondence is relevant enough to bring ANYTHING to its knees.  That's kinda silly.  But I guess if you believe that, just start sending letters now, eh?

Wed, 04/18/2012 - 17:03 | 2356073 Midas
Midas's picture

That was at least a well-balanced review of the situation. 

Wed, 04/18/2012 - 17:03 | 2356074 stacking12321
stacking12321's picture

Newman!

Wed, 04/18/2012 - 17:27 | 2356190 Taint Boil
Taint Boil's picture

 

 

Beat me to it  - should have used Newman!

Wed, 04/18/2012 - 18:01 | 2356316 Agent P
Agent P's picture

Feldman!

Wed, 04/18/2012 - 17:03 | 2356077 buzzsaw99
buzzsaw99's picture

The USPS drinks your milkshake.

Wed, 04/18/2012 - 17:47 | 2356269 Goldilocks
Wed, 04/18/2012 - 17:04 | 2356080 youngman
youngman's picture

AmTrak is next...I am holding my breath...lol

Wed, 04/18/2012 - 17:28 | 2356193 Uber Vandal
Uber Vandal's picture

Wake me up when the highway system makes a profit.

Wed, 04/18/2012 - 18:08 | 2356335 Agent P
Agent P's picture

Take a wild ass guess at how much profit is made possible in this country because of the highway system.

 

Thu, 04/19/2012 - 02:44 | 2357415 Likstane
Likstane's picture

For the contractors who build it or the users?  I'm sick of paying for your roads and your mail and the rest of your bullshit.   When there is profit to be made, a private company will make it happen.  Government is for defending its citizens.  That's all.  

Thu, 04/19/2012 - 07:10 | 2357624 onthesquare
onthesquare's picture

The highway system was desiged to move war machines.  When are Americans going to stop using it and let it be used for just that?

Wed, 04/18/2012 - 17:06 | 2356088 tmosley
tmosley's picture

Why on Earth does it cost the same amount to mail a letter to someone across the street as it does to mail something from Florida to Hawaii?

Privatize the USPS.  Allow competition.  Let the market decide.

Wed, 04/18/2012 - 17:07 | 2356098 buzzsaw99
buzzsaw99's picture

They lose money but they make it up on volume. lololololol

Wed, 04/18/2012 - 22:01 | 2356969 Mr Drysdale
Mr Drysdale's picture

I worked for a Foundry that had that business plan, the site is now a rubble strewn muddy field.

Wed, 04/18/2012 - 22:25 | 2357019 ManOfBliss
ManOfBliss's picture

LOL

Wed, 04/18/2012 - 17:10 | 2356109 Marginal Call
Marginal Call's picture

The market can't compete with the post office, that's why it's been trying to destroy it.

Wed, 04/18/2012 - 17:12 | 2356119 Sophist Economicus
Sophist Economicus's picture

LMAO

Wed, 04/18/2012 - 18:16 | 2356361 0ppenheimer
0ppenheimer's picture

Perhaps, then, we ought to stop giving them exemptions from all taxes and enforcing a monopoly on all their productive services?

Wed, 04/18/2012 - 20:20 | 2356735 Best Satan in Town
Best Satan in Town's picture

The Clause has been construed to give Congress the enumerated power to designate mail routes and construct or designate post offices, with the implied authority to carry, deliver, and regulate the mails of the United States as a whole.

 

http://en.wikipedia.org/wiki/Postal_Clause

Wed, 04/18/2012 - 19:45 | 2356639 centerline
centerline's picture

Yeah, because the government is so efficient.  LOL.

Wed, 04/18/2012 - 20:40 | 2356785 aerojet
aerojet's picture

No private enterprise can compete with any government-subsidized enterprise.  The government can suck money right out of your wallet and give it to the failing bastards--just look at Amtrak! 

Thu, 04/19/2012 - 17:35 | 2359628 mkkby
mkkby's picture

Privatize it to wall street.  Those guys can hypothecate a profit out of anything.  Then make a fortune issuing it bonds and an IPO.  Corzine for postmaster general.

Wed, 04/18/2012 - 17:24 | 2356181 WillyGroper
WillyGroper's picture

What market?

Wed, 04/18/2012 - 17:36 | 2356234 YC2
YC2's picture

They need to IPO so we can fix it using the marginal effects of incremental liquidity on equity prices!

 

Maybe AAPL can buy the USPS! 

Wed, 04/18/2012 - 18:48 | 2356436 Bobbyrib
Bobbyrib's picture

If the USPS goes public, the US would have to bring in workers on visas to work more for less pay. They could always make the requirements for the job nothing an American would know how to do, but then never have the worker to perform that function anyway to argue the need for people on visas to work the jobs.

Wed, 04/18/2012 - 19:39 | 2356622 Umh
Umh's picture

It keeps the need for math skills down.

Wed, 04/18/2012 - 20:38 | 2356781 valley chick
valley chick's picture

always had gone by weight not by the delivery destination.

Wed, 04/18/2012 - 23:14 | 2357099 Neo1
Neo1's picture

Another CONgress created crisis. The big question is who benefits at the Post Offices expense? UPS,FEDEX,BANKS.  Almost all of the postal service’s losses over the last four years can be traced back to a single, artificial restriction forced onto the Post Office by the Republican-led Congress in 2006. At the very end of that year, Congress passed the Postal Accountability and Enhancement Act of 2006 (PAEA). Under PAEA, USPS was forced to “prefund its future health care benefit payments to retirees for the next 75 years in an astonishing ten-year time span” — meaning that it had to put aside billions of dollars to pay for the health benefits of employees it hasn’t even hired, (or BORN) yet, something “that no other government or private corporation is required to do.”If the prepayments required under PAEA were never enacted into law, the USPS would not have a net deficiency of nearly $20 billion, but instead be in the black by at least $1.5 billion. In order to remedy this problem, Rep. Stephen Lynch (D-MA) has introduced bipartisan legislation (which has 193 co-sponsors) that would allow the USPS to spend more of its own money to pay down its deficits, including $6.9 billion in pension overpayments or other overpayments that may total as much as $25 billion to $50 billion. These are Post Office funds, not taxpayer dollars.http://thinkprogress.org/economy/2011/09/28/330524/postal-non-crisis-post-office-save-itself/?mobile=nc The USPS is laboring under "a burden no other agency or company bears." Congress is stealing our hard earned stamp money, for unspecified but definitely probably unfair reasons. Also, we deliver medicine!The postal service's most pressing fiscal crisis arises from a provision in the 2006 Postal Accountability and Enhancement Act that requires it to prefund its Retiree Health Benefits Fund at the rate of approximately $5.6 billion a year from 2007 to 2016; the agency has not been able to make those payments without running up huge deficits.http://reason.com/blog/2011/09/20/congress-is-stealing-the-post

 

Wed, 04/18/2012 - 17:06 | 2356090 blunderdog
blunderdog's picture

Flatten the price structure.  We don't really need the USPS to subsidize the magazine industry, do we?

Wed, 04/18/2012 - 17:15 | 2356127 Sabibaby
Sabibaby's picture

or credit card offer industry and junk mail industry...

Wed, 04/18/2012 - 17:29 | 2356209 NotApplicable
NotApplicable's picture

Lobbyists gotta eat too, ya know.

Wait, on second thought...

Wed, 04/18/2012 - 17:41 | 2356252 blunderdog
blunderdog's picture

I don't think those are "industries."

Wed, 04/18/2012 - 18:07 | 2356331 xela2200
xela2200's picture

Without the Junk mail industry, the USPS will go under the next day.

Wed, 04/18/2012 - 20:39 | 2356783 valley chick
valley chick's picture

correct.

Wed, 04/18/2012 - 22:07 | 2356988 Mr Drysdale
Mr Drysdale's picture

I check my mailbox once a week (seriously) On Thursday evening when I cart the trash bin out to the road, I sort thru my 'mail' and I swear I toss 90% of it into the trash can which happens to be right there. I can bank, and pay bills online. 3 day mail service for me would be more than enough.

Thu, 04/19/2012 - 00:34 | 2357272 Demologos
Demologos's picture

And the bank farms out its data storage to another company that is too cheap to bother encrypting your account information, including mother's maiden name, SSN#, address, password etc.  Next thing you know, you have a seven-year credit hold like I do.  Ever wonder why banks (BOA for instance) show you a picture that only you can recognize with a description that only goes with that picture?  That is because it is so easy to steal your login and password.  The thieves have not figured out a way yet to steal the image that is in your brain you use to verify the picture shown on your login screen.

Wed, 04/18/2012 - 17:06 | 2356091 junkyardjack
junkyardjack's picture

Just because something is unsustainable doesn't mean it shouldn't continue on, just ask the banks

Wed, 04/18/2012 - 17:44 | 2356257 nick howdy
nick howdy's picture

Yes but the difference is, the banks offer nothing at  all in terms of value so obviously we should bail out the banks and not the PS.

Wed, 04/18/2012 - 18:29 | 2356397 NotApplicable
NotApplicable's picture

ROFLOL!

While I'm no friend of the banks (as they exist today) to claim they provide no value is stupid squared. Without some form of capital aggregation, we'd all still be living like the peasants who had to depend soley on their own efforts to survive.

Leonard Reeds' "I pencil" is a fine example of the benefits of honest banking and the division of labor it supports.

Wed, 04/18/2012 - 17:07 | 2356094 Imminent Crucible
Imminent Crucible's picture

"the United States Postal Service, in its current money-losing format, is unsustainable"

If the USPS is unsustainable because it's burning through several billion dollars every year, what about the rest of the US Govt? When was the last time the GSA made us any money? When did the Pentagon last turn a profit? What's the ROI on the TSA?

At least the local postmaster is pleasant, and gets the mail in the PO boxes on time every morning. I have a suggestion: Let's keep the Postal Service, AND BURN THE ENTIRE REST OF THE WORTHLESS UNITED STATES GOVERNMENT TO THE FOUNDATIONS!

Just a suggestion. And no, I do not work for the USPS. I'm still mad about the Silver Eagle a postal worker stole from an envelope I mailed.

Wed, 04/18/2012 - 17:15 | 2356136 notadouche
notadouche's picture

Well maybe the govt would be allowed to get rid of the thousands of postal workers that go to a centralized building all across the country and watch TV all day because they can't work and can't be fired.  Maybe, just maybe those folks could be scrutinized a bit more and weaned of the govt teat.  I have a cousin that works in the post office and claims that 90% are just flat out lazy and have no pride in doing a job they are paid to do.

Wed, 04/18/2012 - 17:41 | 2356249 Umh
Umh's picture

I'm not sure about 90%, but way to many of them look and act like bums. I see quite a few of them in my daily travels; some look sharp and professional, but the rest we would be better off without.

Wed, 04/18/2012 - 17:48 | 2356272 notadouche
notadouche's picture

You woudn't see these employees because they don't actually leave the room.  It's 8 hours a day hidden from the public to get paid and stay off workmen's comp and I suppose a bit of a secret.  And yes 90% is a SWAG made from someone else, not my own eyes as I do not work for the postal service.

You 
Wed, 04/18/2012 - 19:39 | 2356382 Umh
Umh's picture

I only see the ones making deliveries and at the post office front desk. Your probably right on the assumption that the ones meeting the public would be the best:)

Wed, 04/18/2012 - 20:41 | 2356789 valley chick
valley chick's picture

wrong...jobs are by a seniority bid process.  Not by merit.

Wed, 04/18/2012 - 17:50 | 2356274 nick howdy
nick howdy's picture

Lot's of folks People/Politicians/Corporations are on the government teat in one way of another, They say look at the P.O.S. Postal Worker and then get their check from the Government and say "but I deserve it"..  

Wed, 04/18/2012 - 20:15 | 2356729 Withdrawn Sanction
Withdrawn Sanction's picture

the United States Postal Service, in its current money-losing format, is unsustainable

well perhaps some other "money losing format" for the USPS will prove sustainable.  There are practically an infinite no. of possible combinations that wont work.  Let's try them all.  Gives "going postal" a whole new meaning.

Thu, 04/19/2012 - 17:39 | 2359632 mkkby
mkkby's picture

I'll gladly supply my share of the gas and matches.

Wed, 04/18/2012 - 17:08 | 2356096 notadouche
notadouche's picture

Correct me if I'm wrong but I thought I remembered that when i was growing up the postal service was held as a beacon to government efficiency as it was one of the only govt ran agencies that turned a profit.  I may be "misremembering" to steal a phrase but I thought that was the word back in the day.  If so WTF happened?

Wed, 04/18/2012 - 17:11 | 2356120 Blammo
Blammo's picture

Neither rain nor snow nor drive something ..something

Wed, 04/18/2012 - 17:21 | 2356158 knukles
knukles's picture

Well, the Fed turns a profit.

Oh, yeah, I forgot.
They're owned by the bankers, print money for free, wire funds to anybody anywhere, are unaudited....
Oh, neverthefuckmind

Wed, 04/18/2012 - 20:26 | 2356749 valley chick
valley chick's picture

Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds. 

Fixed it for you. :)

Wed, 04/18/2012 - 17:16 | 2356139 Bollixed
Bollixed's picture

"If so WTF happened?"

Pensions... and healthcare for their retirees. They are the only government agency that is required to prepay their health benefits fund.

Wed, 04/18/2012 - 17:45 | 2356262 Bollixed
Bollixed's picture

LOL, how do you get junked for simply stating a fact...:)

Wed, 04/18/2012 - 18:05 | 2356295 nick howdy
nick howdy's picture

That is a fact...ask this guy..

http://www.youtube.com/watch?v=STd8WKEXbEA&feature=relmfu

 

Yes he works for the PS...Don't piss him off..He brings new meaning to the phrase "Going Postal".

Wed, 04/18/2012 - 19:49 | 2356647 centerline
centerline's picture

A week or so ago someone junked a response that simply stated a physics equation.  Must be the same guy/gal.

Wed, 04/18/2012 - 17:58 | 2356301 Benjamin Glutton
Benjamin Glutton's picture

Poison pill from previous admin.

 

nice to see someone is paying attention.

Wed, 04/18/2012 - 17:19 | 2356149 Normalcy Bias
Normalcy Bias's picture

I don't think there were letter carriers pulling down the equivalent of $80-90K a year back then.

Wed, 04/18/2012 - 20:31 | 2356694 valley chick
valley chick's picture

ROFLOL....No they do not make 80-90K a year...even now.

Thu, 04/19/2012 - 00:37 | 2357281 BooMushroom
BooMushroom's picture

There are actually a few carriers that can walk fast and put mail in the boxes quickly. They get a metric fuckton of overtime, because they have to bail out the shitheads who can't get their route finished by 6pm.

They're the ones pulling down 90k/yr.

Thu, 04/19/2012 - 06:23 | 2357565 valley chick
valley chick's picture

lol...no way the carriers are making 90K.  Management yes...carriers, clerks, mail handlers no.  You are talking about level 4,5, and possible level 6 (may have a few of those employees still around) versus management at levels 11 on up.  To maybe get as high as 50K as a distribution clerk working nights and all possible overtime available.  Working after 6 pm would make available the pay for night differential which the carriers can not make.  Plus the carriers do not make the overtime when they have to be back with mail for pickup to be transported to the distribution centers.  As for rural carriers they get basically an expense check for using their own vehicle and for gas which barely covers if at all completely. 

Wed, 04/18/2012 - 17:19 | 2356155 xela2200
xela2200's picture

I thought that the US mail was founded as a necessary means of communication, and as such it became the task of the government to manage it. Not really as a for profit entity but more like a social program. Imagine a time of bad or no roads in bad wheather. Hence the slogan "Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds."

Wed, 04/18/2012 - 18:34 | 2356405 NotApplicable
NotApplicable's picture

Ummmm... NO.

It's about monopoly revenue. Lysander Spooner beat the pants off of them, so they shut him down and declared an official monopoly. Like everything government "does," someone was already doing it long before they came along with their gang and took it over. Why? Because someone recognized an unmet human need and found an efficient enough way to meet it as to attract customers. (that's how freedom works)

Wed, 04/18/2012 - 20:07 | 2356706 DCFusor
DCFusor's picture

True. They were the *only* ones who would go to any address.  Not 35 years ago it was very difficult to get Fedex or UPS to come to where I live at all, for any money.  They just wanted the juicy profitable routes.

Wed, 04/18/2012 - 20:32 | 2356765 valley chick
valley chick's picture

@DCFusor, even today the other carriers (FED EX, DHL, UPS) deliver their packages to the post office and have the postal carriers deliver to the door.  And may i add quite a few of them.

Wed, 04/18/2012 - 20:22 | 2356742 knukles
knukles's picture

Actually, the USPS was established to take the place of shouting which was first established as a necessary means of communication.

Wed, 04/18/2012 - 17:21 | 2356162 Marginal Call
Marginal Call's picture

The Bush administration put a provision in their budget to kill em. 

Wed, 04/18/2012 - 17:54 | 2356285 notadouche
notadouche's picture

Is this you Obama.  It's time to quit blaming Bush.  The postal service as an operation started failing long before Bush came along and Obama has deemed he can do what he wants when he wants, rule of law be damned.  So C'mon now Bush, really????  Not saying he is blameless in the worlds problems but it's time for hope and change.

Wed, 04/18/2012 - 22:39 | 2357047 SilverRhino
SilverRhino's picture

Hey shithead.  Who's president again?   NOW? 

Wed, 04/18/2012 - 17:33 | 2356212 Raymond Reason
Raymond Reason's picture

I think their big present day shortfall is from a change in terms on debt.  I don't know if this is true, but i was told by a postal worker that the post office used to operate under a loan with 90 year terms.  And recently the terms were shortened drastically.  Hence the shortfall. 

Wed, 04/18/2012 - 18:26 | 2356388 Umh
Umh's picture

Would you loan them money for 90 years?

Wed, 04/18/2012 - 17:39 | 2356242 bluestaq
bluestaq's picture

First-class mail volume is down almost 50% from 12 years ago..that alone is disasterous for the USPS.  That's the story that gets all the press, but what doesn't get talked about is that the USPS can only raise postage costs by the "official" amount of inflation.  Considering that the USPS is the nation's largest consumer of gas and gas costs have skyrocketed beyond the "official" rate of inflation, its should be no suprise that they are getting killed because they can't charge what the service costs to produce.  We can blame the unions all we want, and there is enough blame to go around, but even this is a fiat currency issue at its core.   

Wed, 04/18/2012 - 18:27 | 2356393 Umh
Umh's picture

You've got a point, but if they were not delivering all that junk mail their gas cost would go down and their bags would not be so heavy.

Wed, 04/18/2012 - 20:05 | 2356698 valley chick
valley chick's picture

ding...ding...ding we got a winner!!  :)

Wed, 04/18/2012 - 22:12 | 2357002 Mr Drysdale
Mr Drysdale's picture

Or quit saturday deliveries, and only go to 3 days a week.

Wed, 04/18/2012 - 17:08 | 2356097 RacerX
RacerX's picture

Bwaha ahahahahah.. Labor unions are goign to suck on this teat for as long as they can.

Wed, 04/18/2012 - 19:52 | 2356666 centerline
centerline's picture

The next great divide... Public sector against private sector.  That is when we find out most public sector workers actually think the private sector owes them a pension, benefits, heathcare, etc.

Wed, 04/18/2012 - 17:09 | 2356102 knukles
knukles's picture

Oh, I got it!
The New Normal Save!

Just raise the price of stamps by 1 cent for the 1%ers.
Make those fucking rich bleed.

Social Justice for All.

Wed, 04/18/2012 - 17:21 | 2356157 CrockettAlmanac.com
CrockettAlmanac.com's picture

Or try the Buffet Postal Rule: Rich bastards must be compelled to pay the same proportion of their income for postal services as do their secretaries.

Wed, 04/18/2012 - 17:11 | 2356112 Gringo Viejo
Gringo Viejo's picture

When it absolutely, positively has to be there someday.

Wed, 04/18/2012 - 18:29 | 2356398 Umh
Umh's picture

I'll give them a bone. Their delivery time is pretty good when it gets delivered to the correct address.

Wed, 04/18/2012 - 17:11 | 2356114 0ppenheimer
0ppenheimer's picture

No no no.

It was just those evil Republicans who forced the USPS to fund the NPV of their pensions that are the cause of this problem.

 

If we don't force them to actually fund their million-employee pension program then they'll be doing fine (as long as we keep exempting them from nearly every tax and we enforce a federal monopoly on their only productive services)

Wed, 04/18/2012 - 17:21 | 2356163 xela2200
xela2200's picture

I wish people would stop aligning with themselves with a party. The same idiot politicians on both sides. Pepsi or Coke.

Wed, 04/18/2012 - 17:24 | 2356169 knukles
knukles's picture

Wait a minute... coke's illegal in California...

Wed, 04/18/2012 - 18:12 | 2356344 0ppenheimer
0ppenheimer's picture

I'm not aligning with a party, but the blame for USPS's woes is almost always attributed to Republicans.

I'm not suggesting one party is superior to the other. They're both shiprats AFAIC

Wed, 04/18/2012 - 19:36 | 2356615 Reptil
Reptil's picture

exactly! and again the american public swallows the lies.

who benefits?

THE BANKS!

 

Wed, 04/18/2012 - 21:24 | 2356915 Dburn
Dburn's picture

Fucking idiot.

Thu, 04/19/2012 - 00:41 | 2357287 BooMushroom
BooMushroom's picture

Imagine if every entity had to fund their pension from revenues!

Wed, 04/18/2012 - 17:10 | 2356115 Hobbleknee
Hobbleknee's picture

Imagine how much cheaper UPS and FedEx would be if they were allowed to use your mailbox.

Wed, 04/18/2012 - 17:21 | 2356164 CrockettAlmanac.com
CrockettAlmanac.com's picture

Occupy Mail Slot. Coming to an address near you.

Wed, 04/18/2012 - 19:35 | 2356607 Midas
Midas's picture

There is nothing stopping you from putting up your own box for either UPS or Fedex.

Do NOT follow this link or you will be banned from the site!