United States Postal Service
I’ve decided to start a new feature here at United Liberty, one that would run on a monthly basis. I’m calling it “7 on the 7th.” It will be a list of 7 agencies, on the 7th of the month, that we should get rid of. The purpose is to showcase just how many government agencie that exist, which most Americans just don’t realize. While they may think the government does too much stuff, I doubt that many know just what the government really does. Most don’t know about the ridiculous organizations that are prt of our government, and I can say because I don’t know.
So this will be informative not just for you, dear reader, but also for yours truly. What sort of stupid things can we uncover? Feel free to submit your suggestions for next month’s feature in the comments (but please, don’t be silly and tell me we must get rid of the Department of Defense; we’re moderate, sensible libertarians here, not barking-at-the-moon anarcho-capitalists.) Hopefully, if enough on the web read this feature, we may be able to spark a genuine discussion about the role of government and what it should actually be doing, so when some politician says we need more money to fund essential services, we can tell him (or her) that nothing he (or she) is demanding funding for is actually essential.
Now, on to the inaugural list. For this one I’ve decided to go for the low-hanging fruit, to get them out of the way and remove temptations for future entries. I don’t really expect to surprise anyone with these, but that just goes to show you how many folks think a lot of what our government does is rubbish.
1 - Department of Homeland Security
On Wednesday, the United States Senate narrowly avoided a two-year ban on the closing of post offices, which prompted me to ask: do you guys still live in the 1950s?
In a world of Gmail, Twitter, Facebook, cloud services, Google Drive, Dropbox, 3D printing, UPS, DHL, and who knows what else, I have to ask: who still uses the postal service any more?
There are only a few people with which I still get mail from through the USPS. The first are direct mail types, and nobody reads those sort of things. (This is the way your trash can goes “OM NOM NOM.”) The second are my parents and grandparents, so, in other words, old people.
The thing is, as I said, nobody is reading the former, and the latter are getting fewer and fewer. Meanwhile, the postal service is hemmorraghing money; the Cato Institute’s Downsizing Government project notes that it lost $20 billion between 2007 and 2010, and it hasn’t done any better since then. The thing is, we taxpayers are being forced to foot the bill. A bill for something that these days, an increasingly small portion of the populace actually wants. And, at the same time there’s decreasing demand for its services, its costs have continued to go up as it struggles to deal with employee pensions. Not a good situation to be in.
Here’s a better idea: let’s just privatize the post office. And by privatize it, I don’t mean sell it to one major corporation, but let’s privatize the entire industry. Allow competing mail delivery services in the market. Ensure that there are no more monopolies on first-class mail within the United States.
The United States Postal Service is in trouble. Like private enterprise, the postal service has taken a hit in this economy, and that is for an entity that’s been taking a hit for years due to the rise of email and so much of business being handled via the internet rather than by stamp. However, the postal service isn’t a private enterprise. It’s a government entity.
Since 2007 the USPS has been unable to cover its annual budget, 80 percent of which goes to salaries and benefits. In contrast, 43 percent of FedEx’s budget and 61 percent of United Parcel Service’s pay go to employee-related expenses. Perhaps it’s not surprising that the postal service’s two primary rivals are more nimble. According to SJ Consulting Group, the USPS has more than a 15 percent share of the American express and ground-shipping market. FedEx has 32 percent, UPS 53 percent.
The USPS has stayed afloat by borrowing $12 billion from the U.S. Treasury. This year it will reach its statutory debt limit. After that, insolvency looms.
On Mar. 2, Postmaster General Patrick R. Donahoe warned Congress that his agency would default on $5.5 billion of health-care costs set aside for its future retirees scheduled for payment on Sept. 30 unless the government comes to the rescue. “At the end of the year, we are out of cash,” Donahoe said. He noted that the unusual requirement was enacted five years ago by Congress before mail started to disappear.
Now…just imagine what the hell will happen with the government trying to grab control of more and more? That just can’t be good.
Earlier this year, I noted that the budget for the United States Postal Service (USPS) would be $238 billion over the next 10 years. Last week, the USPS acknowledged that its budget shortfall for FY 2010 would be $8 billion, and warned that it will be broke by the end of next year:
All federal agencies and the USPS, a quasi-federal outfit, have workers’ compensation obligations to help fund four major disability compensation programs.
The Postal Service also announced Friday that it plans to deplete its $15 billion line of credit with the U.S. Treasury by borrowing the remaining $3.5 billion. Although the Postal Service does not use taxpayer funding, it has tapped the credit line since the early 1990s. Depleting it means the Postal Service probably will go broke at the end of fiscal 2011 unless Congress takes action, members of the Postal Service Board of Governors said Friday.
The historic losses occurred despite more than $9 billion in cost cuts in the past two years, including the elimination of about 105,000 full-time jobs, “more than any other organization, anywhere,” USPS Chief Financial Officer Joe Corbett said Friday.
Over at Downsizing Government, Tad DeHaven points out that health benefits that labor unions have managed to squeeze out are part of the problem; he also concludes that privatization of the USPS is the way to go:
The United States Postal Service is facing a $238 billion budget deficit over the next decade and may drop Saturday mail delivery to help cut costs:
The U.S. Postal Service estimated Tuesday that it will lose $238 billion in the next decade if lawmakers, postal regulators and unions don’t give the mail agency more flexibility in setting delivery schedules, price increases and labor costs.
Estimates also predict that letter carriers will deliver 150 billion pieces of mail in 2020, a drop of about 26 billion pieces from last year. Postmaster General John E. Potter plans to press lawmakers and the Postal Regulatory Commission in the coming weeks to eliminate Saturday mail deliveries and allow the mail agency to raise prices beyond the rate of inflation, if necessary.
“We intend to be around for decades and centuries to come,” Potter told a meeting of regulators, congressional staffers and major mail customers Tuesday. “These are the first steps that are necessary to make sure that that occurs.”
It is time to privatize the USPS, and not only should the postal service be privatized, UPS and FedEx should be able compete with it.
With all the fiscal issues facing the nation, some of which were pointed out earlier today, the post office is just more deadweight on taxpayers.
For an government entity that will lose $7.8 billion in 2010, the United States Postal Service doesn’t seem all that concerned about cutting back to save some money, as Tad DeHaven writes over at Cato:
A recent audit by the USPS inspector general found $800,000 in unjustified and “imprudent” purchases, most of which occurred in just a five month span.
The following are some highlights lowlights: