Tag: U.S. Postal Service

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free trade & free markets general freedom government transparency national politics & policies responsibility too much government

Post Dated

USPS, Postal Service, Post Office, Mail, bankrupt, government, inefficiency, Common Sense, Illustration

What does a business do whose market share is decreasing, is billions of dollars in debt, and which incurred one-​third of that debt just last year?

Realistically, it cannot be sustained. Not as a normal business.

Of course, the business in question has been struggling to reform, has been cutting costs. But can’t cut enough.

I’m referring to the United States Postal Service. Not a “normal business,” either: no “normal business” is authorized in the U.S. Constitution — or must suffer with the 535 members of Congress as its board of directors.

Kevin Kosar, writing at the Foundation for Economic Education, says the “existential crisis is already happening.”

And by this he doesn’t mean that the organization is going through a bout of anxiety leading to Nausea, or is so estranged from humanity that on a beach the company will kill an Arab — though that may be indeed true, “going postal” and all. He means, simply, what his title says: “USPS Is Going Down, and It’s Taking Billions with It.”

Many on the left say the problem is Congress’s insistence that the enterprise fund its employee retirement program. Kosar quotes an economist who figures that, even without current (and still inadequate) levels of pension contributions, the post office would have “lost $10 billion over the past seven years.”

Besides, those pensions must be paid for at some time — postponing them just delays the inevitable, making a future bust that much bigger, less manageable. (Current level of unfunded liability? $54 billion — which is not accounted for in its official debt.)

The Internet is more important than the post, now. Could it be time to junk mail?

This is Common Sense. I’m Paul Jacob.

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national politics & policies too much government U.S. Constitution

Authorized, But in the Red

According to the late economist James Buchanan, there exist three basic categories of government functions: protective, productive, and redistributive.

The protective functions are most basic. As inscribed in the Declaration of Independence, we are to be protected by government not in a scattershot way, but by having our rights delineated and defended. Think courts and the military.

The redistributive functions make up the bulk of the federal government, today … according to a recent Heritage Foundation chart, “More than 70 Percent of Federal Programs Goes to Dependence Programs.” Most of these, like Social Security and Medicare, were not originally contemplated as tasks for the federal union, and are flagrant violations of the Constitution.

But some “productive” (business-​like) functions were placed into the Constitution, the most famous being the authorization to create a postal service.

Though no longer an official wing of the U.S. Government, the Postal Service is still hamstrung by congressional micro-​management, as the shrinking mail biz busies itself trying to erase red ink.

The current notion is to drop Saturday delivery of all but packages. The enterprise hopes to save billions on this reform, alone, and was able to initiate the service cut without Congress’s approval by gambling on what some are calling a legal loophole.

Perhaps as politically dangerous is the ongoing attempt to get rid of post offices in smaller communities, replacing them with “Village Post Offices” that private enterprise would run.

It’s worth noting that though the Constitution allows for mail delivery and a few other “productive” services, these aren’t very productive — at least, they tend to operate in the red.  Besides, what is authorized by the Constitution doesn’t mean required by the Constitution.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies too much government U.S. Constitution

The Post Office’s Future?

At some point approaching catastrophe, one has to stop offering googly sounds of uplift and hope, and just speak the truth.

Postmaster General Patrick Donahoe may understand that. The U.S. Post Office, he recently told the National Press Club, is “in a deep financial crisis because we have a business model that is tied to the past.” Deep ties to the past, indeed. Setting up a postal system was written into the Constitution.

Early in the system’s history, postal positions served as rewards to friends of successful politicians. This put a lot of bad apples into the cider; the business soured. Postage skyrocketed.

This sorry situation brought entrepreneurs into the market, delivering letters at a fraction of the government system’s prices. The politicians fought back, took the competitors to court, and won — on dubious Constitutional grounds.

But they did overhaul the system, reducing prices.

That was a long time ago. Today’s situation may be worse. As Donahoe put it, “We are expected to operate like a business but we do not have the flexibility to do so. Our business model is fundamentally inflexible.”

No surprise, Congress is inflexible. But there are competing bills rumbling around to allegedly fix the financial woes of the institution Donahoe calls “a national treasure.”

Well, if it’s a treasure, sell it off: The federal government could use the money. (Though likely not well.)

And the people could use a good privatized mail service. Or two. Or more.

This is Common Sense. I’m Paul Jacob.