Mike Kueber's Blog

November 26, 2012

Another losing year for the Post Office – $15.9 billion

A few days ago, a column in the Washington Post by Joe Davidson, an apologist for the federal bureaucrats, lamented Congress’s mistreatment of that venerable federal institution, the U.S. Post Office by declaring:

  • It is only appropriate that Congress act to solve a postal financial crisis that legislators had a big hand in creating. More than $11 billion of the $15.9 billion loss, by far the biggest chunk, comes from required payments to pre-fund retiree health benefits. These payments are unique to the Postal Service, and they have nothing to do with mail delivery. USPS has defaulted twice on those payments since August. Without those payments, the net loss would have been $2.5 billion, not good, but more manageable.

Only in Washington would it be considered unfair to require an employer to pre-fund retiree health benefits.  You would think that any sentient American would have learned the stupidity of Social Security’s pay-as-you-go arrangement, but apparently that is not true of the denizens of Washington.

Coincidentally, the book currently on top of my reading list is Freedom Manifesto by Steve Forbes and Elizabeth Ames, and its first chapter is titled, “FedEx or the Postal Office?”  According to the authors, the U.S. Postal Service is the perfect example of service provided by a government bureaucracy – long lines and sluggish service – while FedEx exemplifies private enterprise – efficiency, reliability, and most importantly, innovation.

All of which invites the post-ObamaCare question – what if America’s healthcare industry ends up looking less like FedEx and more like the Post Office?

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1 Comment »

  1. Yeah right.

    Go to Fedex, and ask them to deliver a letter for 47 cents.

    The Post Office is inefficient not because it’s a (quasi-)government operation, but because its hands are tied six ways from Sunday. They are required to pre-fund pensions 20 years in advance. Their rates and conditions of services are not under their own control. They are trying to maintain an essential piece of national infrastructure at a time when their revenue has crashed (direct mail advertising is down about 40 percent since the 2008 crash).

    I never understood the popular contempt for the US Post Office. They will pick up a parcel from your house, and deliver it to any other address in the US, and usually within two or three days. All for a price amounting to less than two minutes of the average citizen’s labor. I don’t know of any other country’s post office that provides a remotely similar deal.

    Personally, it doesn’t bother me that it’s losing some money: the simple fact that it’s there is a benefit to all of us, like schools, or roads, or air traffic control. But if you really want it to be self-sustaining, let it set its own postage rates, and give it greater autonomy in its labor practices.

    Comment by Anonymoose — November 27, 2012 @ 10:42 pm | Reply


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