Should the Post Office Be Allowed to Default and/or Go Out of Business?

@Irishk,

Irishk wrote:

I'd really miss Saturday delivery, though.

Hi Irish
You're the first person I've ever heard say that.

Me, I think they should cancel both Saturday AND Wednesdays.

If a person insists on getting mail those days, they can pay a premium, to cover the excess cost.

Curious Irish, what kind of things to you get on Saturdays that can't wait until Monday?

Or for that matter, that you have to have on Tuesday, that can't wait until Thursday?

1 Reply

@chai2,

chai2 wrote:

Curious Irish, what kind of things to you get on Saturdays that can't wait until Monday?

Or for that matter, that you have to have on Tuesday, that can't wait until Thursday?

Though I'm not Irishk ...

I personally would miss e.g. magazines, which I get on subscrition, small parcels (which aren't delivered by one of the parcel services) and parcel, which are delivered by the post. (I like to order something by amazon on Fridays ... and then read it over the weekend).

1 Reply

@Cycloptichorn,

I was not aware, but it figures the GOP would do that. They apparently only want the government to fund military and police and let everything else default.

1 Reply

@Walter Hinteler,

Walter Hinteler wrote:

chai2 wrote:

Curious Irish, what kind of things to you get on Saturdays that can't wait until Monday?

Or for that matter, that you have to have on Tuesday, that can't wait until Thursday?

Though I'm not Irishk ...

I personally would miss e.g. magazines, which I get on subscrition, small parcels (which aren't delivered by one of the parcel services) and parcel, which are delivered by the post. (I like to order something by amazon on Fridays ... and then read it over the weekend).

Well....I guess you could order something from amazon on Thursday, couldn't you? Anyway, the postal service doesn't deliver amazon, UPS does.

Do you really know exactly what day magazines are going to be delivered? Wow, you Germans really ARE on a timetable, aren't you?
Are these parcels needed things, like medical supplies, or that you really need immediately?

2 Replies

try to get UPS or FedEx to deliver anything for under a buck, or for that matter for a buck or two, or anything less than about $6 minimum and usually far north of that.

Try to get a media rate (books, printed matter, CDs, DVDs, etc.) from UPS.

Try to get UPS to deliver something at your convenience, or make it easy for you to get it if their inflexible schedule doesn't work for you. They dump packages worth hundreds of dollars outside your building even if they are supposed to require a signature. Used to get business packages at home--they would only deliver to business addresses in the morning, and I was gone when they came around to residential addresses after 5pm. Couldn't get them to hold it for pickup. Took me two years to figure a work around so they couldn't screw up the delivery. I do not like UPS.

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@chai2,

chai2 wrote:

Well....I guess you could order something from amazon on Thursday, couldn't you? Anyway, the postal service doesn't deliver amazon, UPS does.

Do you really know exactly what day magazines are going to be delivered? Wow, you Germans really ARE on a timetable, aren't you?
Are these parcels needed things, like medical supplies, or that you really need immediately?

We get amazon mainly from the postal services, be it DHL-parcels or small parcels by the postman.

Yes, magazines come exactly on the same days, weekly, bi-weekly ...

Parcels on Saturdays are needed when e.g. it's my birthday .... or I forgot a birthday present for s.o.'s birthday on .
Or when I waited for them already all the week Wink

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http://www.pbs.org/wnet/need-to-know/five-things/the-u-s-postal-service/11433/

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@Cycloptichorn,

Cycloptichorn wrote:

You guys do realize that the GOP is intentionally forcing the post office to fail, by requiring them to fully fund their next 75 years of retirement? Something which no business or private company does, let alone other sections of the government.

Look up the 2006 Postal Accountability Enhancement Act (PAEA). The whole thing was designed to break the back of the postal union, and it's working.

The idea that the post office has somehow become insanely unprofitable is a total joke. It was rigged by the GOP to fail. All part of their 'massively shrinking government' program.

Cycloptichorn

I think you owe us some explanations here. In the first place defined benefit retirement programs have become rare in the business world. In the second, those that exist are required to fully fund their programs to the present value of expected future benefits ... forever. Government retirement programs have no such requirement. They, like social security, are "funded" by the faith and creedit of the government. I don't know the details of the legislation to which you are referring, but I suspect it merely applies existing private sector requirements to the now partly privatized Postal Service.

In short these are merely requirements that every business having a defined benefit retirement scheme must meet.

1 Reply

@georgeob1,

Quote:

I don't know the details of the legislation to which you are referring, but I suspect it merely applies existing private sector requirements to the now partly privatized Postal Service.

From Wikipedia:

Quote:

The Act requires the Commission to develop and maintain regulations for a modern system of rate regulation, consult with the Postal Service on delivery service standards and performance measures, consult with the Department of State on international postal policies, prevent cross-subsidization or other anticompetitive postal practices, promote transparency and accountability, and adjudicate complaints. It required the Postal Service to fund within 10 years the pensions for all employees for 75 years.

I'm not familiar with the exact procedures that the private sector (or even other elements of the government) use to fund their pension plans, but I highly doubt that most of them have 75 years of pension funding socked away.

Here's a more in-depth review of the subject:

http://www.fas.org/sgp/crs/misc/R40983.pdf

See page 7.

Quote:

The Role and Performance of the Postal Regulatory Commission

The Funding of the Postal Service Retiree Health Benefits Fund

After generating modest profits from FY2004 through FY2006, the USPS lost $5.3 billion in FY2007, $2.8 billion in FY2008, and $3.8 billion in FY2009.27 Were it not for congressional action to reduce a statutorily required retiree health benefits payment (see below), the USPS
would have lost $7.8 billion in FY2009.

The USPS’s financial losses resulted from declining operating revenues and significantly increased operating costs, the latter of which was largely the effect of the PAEA’s requirement that the USPS prefund its future retirees’ health benefits. 28 Section 803 of the act established a 10- year payment schedule to greatly reduce the size of the USPS’s future retiree health benefits
obligation (Table 1)

Table 1. Postal Service Retiree Health Benefits Fund Payments Under PAEA
Fiscal Year Payment (billions)
2007 $5.4
2008 $5.6
2009 $5.4
2010 $5.5
2011 $5.5
2012 $5.6
2013 $5.6
2014 $5.7
2015 $5.7
2016 $5.8

Source: Postal Accountability and Enhancement Act (P.L. 109-435, Sec. 803; 120 Stat. 3251-3252).

If it were not for the requirement - put in place by the GOP - to fund 75 years worth of retirement costs within just a decade, the post office would only be facing modest financial difficulty at this time, like many other businesses are during this recession. I thought it important to point out that it was legislative changes made by the GOP that have brought about their largest financial difficulty, not some failure of management or sudden inability to profitably send mail.

I also wanted to ask - since when is our postal service partially privatized? Can you expound more on that? To the best of my knowledge, the USPS is a quasi-governmental agency; not a privatized one in any way.

Cycloptichorn

1 Reply

@Cycloptichorn,

Well if it weren't for the fact that the manufacturer would require me to pay for it, I would have my own jet aircraft.

I think there are basic accounting issues here that you don't understand. All issuers of annuities, and that includes all private sector (and most state & local government) retirement programs are required by law to have in hand, dedicated assets equal to the present value (i.e. with adjustments for expected interest rates, inflation, and any additional earnings on those assets) of ALL future payouts, based on existing claimants and actuarial data for life expectancy.... forever.

Many companies have failed because of unexpected growth in their pension or retiree health claims, or because they imprudently (or perhaps illegally) underfunded their programs. In those cases the investors lost all their assets and the employees their jobs.

Someone has to pay these costs.

My impression is that the payment schedule to which you refer was simply a reasonable way to get the Postal Service gradually into compliance with existing universal requirements after it was semi privatized many years ago (in the early 1970s).

The Federal government operates on a different principle entirely. It funds current and future obligations out of current revenues (tax collections) - something that is illegal for any other entity. That indeed is was the crime for which Charles Ponzi was convicted in 1020, and it was the basis for Gov. Perry's expressed concerns about Social security. Though I believe he overstated his case, it is a fact that, owing to demographic changes, we do face the need for some restructuring of Social Security. It is merely unfortunate that the current Administration appears to be denying this issue as a political tactic.

.

1 Reply

@georgeob1,

Quote:

My impression is that the payment schedule to which you refer was simply a reasonable way to get the Postal Service gradually into compliance with existing universal requirements after it was privatized many years ago.

You didn't answer my question regarding this 'privatization' claim. In what way, exactly, was it privatized? I'm truly curious here, not trying to play a rhetorical game. It certainly seems that the post office considers itself to be a government agency, not a private corporation or business.

Not only that, but I have found MANY articles written by right-wing sources over the last 2 decades calling for the privatization of the USPS as a cost-savings measure. Doesn't that conflict with your claim?

Our different opinions regarding the correctness or incorrectness of the decision, my earlier statement stands: the USPS was turning a profit year after year before the GOP changed the rules on them. It was not a crisis of governance or inefficiency of gov't workers which has lead to some large unprofitability on their part.

Cycloptichorn

1 Reply

@edgarblythe,

If push comes to shove, I suppose the post office could default and/or go out of business. I don't think it will happen, tho. Probably post office workers will be laid off, those still working will have pay/benefit cuts. That's just how it goes, followed by the closing of many post offfices, then God-only-knows-what-comes-next.

I remember the old small offices would have so much traffic around them that we couldn't get to the door, hence the building of more & larger ones. Sell the buildings, fine other ways to save the system. Just do it, quick, I say.

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@Cycloptichorn,

Back in the 1970s the government amended the Postal Service laws requiring the agency to become self funding like any other business. The Postal Service still remained a government entity with government provided liability insurance, exemptions from taxes on any of its properties or operations, and many other real costs of operating a business (as for example with FEDEX). However it was required to fund its own payroll and benefit programs for its employees. This requirement included compliance with existing law regarding the funding of future pension liabilities. That is the issue that you are apparently concerned about.

The costs in question are real, and they exist in any other business. Even with them, the Postal Service enjoys many very large government-provided economic benefits (or subsidies if you wish) that (say) FEDEX and UPS don't enjoy. Your assertion that the Postal Service was making a profit is fatuous and incorrect. They face declining demand for their services and are behind the curve in restructuring to meet a changing situation. Moreover their existing labor contracts provide retirement benefits in terms of age and service required for eligibility and amount that their revenues cannot sustain. They must adapt.

Whether you regard the source of their problems as internal inefficiency or external change, or a combination of both, the problems remain and they are real. These are issues every business in the nation faces every day. There is no reason the Postal Service should be exempt from them.

There are some who would like to see the Postal Service fully privatized as has been done successsfully in other countries (see Walter's comments about the German System). That is a separate issue. Given the Postal Service's current situation I doubt they could make it without some urgent reforms.

1 Reply

@georgeob1,

Quote:

This requirement included compliance with existing law regarding the funding of future pension liabilities. That is the issue that you are apparently concerned about.

Apparently this is untrue, or the 2006 law requiring them to do so immediately would have been unnecessary, wouldn't you agree?

As a governmental agency, why should the post office be required to fully fund it's pensions, when all other branches of the gov't are not required to?

Quote:

Your assertion that the Postal Service was making a profit is fatuous and incorrect.

That certainly contradicts the data I've seen, which reports that they were turning a profit in the years leading up to the legislative change. Indeed, the data provided by the post office claims this directly.

But data is nothing compared to the Power of Assertion!

Our disagreement about the appropriateness of the 2006 law not withstanding, my original point remains perfectly accurate: legislative changes instituted by the GOP have led to the Post Office reporting a loss the last several years, not any sudden changes in volume or ability of those who administer it.

Cycloptichorn

1 Reply

@Cycloptichorn,

Cycloptichorn wrote:

Our disagreement about the appropriateness of the 2006 law not withstanding, my original point remains perfectly accurate: legislative changes instituted by the GOP have led to the Post Office reporting a loss the last several years, not any sudden changes in volume or ability of those who administer it.

Cycloptichorn

Your assertion is untrue. The volume of mail handled by the postal service has been declining very fast for well over a decade, and the declines appear to be accelerating. The Postal service has been struggling to adapt its assets and configuration to meet the changing market, but it is behind the curve. That is the driving issue here.

It is true that relieving them of the obligation to meet their payroll or fund their benefit programs would eliminate the looming crisis. That would solve the problems of any failing organization. However, it doesn't constitute a reason to do so. That, unfortunately, would require someone else to foot the bill and carry the debt burden of unfunded future liabilities. Apparently you believe these should be borne by the government and that people other than yourself should be taxed to pay for it. That, of course, is your right. Good luck with it.

1 Reply

@georgeob1,

Quote:

That is the driving issue here.

According to the data I posted above, you are incorrect about this. But, that's never stopped you in the past, so why should it now?

ASSERTION POWER, GO!!!!

Cycloptichorn

1 Reply

@Cycloptichorn,

Oh I see. You assert that the cause is the requirement to fund their pension liabilities (like any other business). While I assert the driving factor is the (easily verifiable) decline in demand for their product, and point out that the infusion of public money will temporarily solve any company's problems, but may not solve their basic market problems.

Now you assert that my accurate observation is wrong.

You really are full of it.

1 Reply

@georgeob1,

georgeob1 wrote:

Oh I see. You assert that the cause is the requirement to fund their pension liabilities (like any other business).

But, they aren't 'like any other business.' They are a governmental organization. Hell, it's in the Constitution!

They are not, and shouldn't be considered, 'like any other business.' That's the failure in your thinking.

Quote:

Now you assert that my accurate observation is wrong.

You pre-emptively judge your own assertions as 'accurate,' with no data to back it up, and then call me full of it?

You have basically committed a tautology here; saying that your assertions are right because they are right. It's a Logical Fallacy.

I refer you once again to the paper I linked to above, which you clearly didn't read. Please attempt to do even a tiny bit of work in our discussions, instead of this continual, sneering laziness you display. It's unbecoming.

http://www.fas.org/sgp/crs/misc/R40983.pdf

Are revenues declining? Yes. But, are they the significant driver of post office deficits, or are greater operating costs due to the new rule change? The evidence I've linked to indicates that the greater operating costs are the cause of the deficits, far more so than declining revenues.

Cycloptichorn

1 Reply

@Cycloptichorn,

Why should I read it? I carefully read the details of a USA Today article you cited as "proof" of some assertion on another thread, and it turned out you likely hadn't read beyond the headline. I pointed out ther salient details of what was actually stated in the article and how they contradicted your assertion, and you declined to comment. You are a mile wide and a millimeter deep. Good at manipulating web citations, but inadequate at thinking and evaluating their content - and unable to deal with the substance of disagreement without making distracting accusations or sneakily altering the propositions you so loudly assert.

1 Reply

@georgeob1,

georgeob1 wrote:

Why should I read it?

This is the only meaningful part of your post - you're full of ****, George. You won't even look at proof against your position, which is awful convenient for you. Always a convenient excuse for you, that prevents you from doing actual work. You're lazy.

You should read it because it behooves people to read evidence their opponents in discussions like this present.

As to the other piece, I didn't decline to comment on it - I pointed out later that none of your criticisms were meaningful to my overall point. I then proceeded to provide many other citations which back up my point. You became strangely silent on the issue after that, though, not deigning to actually read or consider any of them...

Cycloptichorn

1 Reply

Should the Post Office Be Allowed to Default and/or Go Out of Business?

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