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U.S. Postal Service Still Bleeding Money

A quick update on the status of the employment agency that is the U.S. Postal Service:

The Wall Street Journal is reporting that the government agency has posted yet another massive loss in the latest fiscal quarter, to the tune of almost $2 billion, despite raised delivery rates and expanded package delivery.

Zero Hedge shares my scorn for this bloated and outdated arm of government, and has helpfully taken the poignant excerpts from the WSJ article out for us to read with (mild) shock and fury.

From the WSJ: “The USPS said its total liabilities were $67.16 billion at the end of the period, compared with $23.16 billion in assets.”

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Bleeding Money? You Should Have Gone to Bed...


Having Nightmares? 30 second proof.

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

Be Aware of the "Big Lie" about the Postal Service

I appreciate our Postal Service, the one government agency that has been around for such a long time and does a good job. The problem is, Congress passed the Postal Accountability and Enhancement Act (PAEA), which was signed into law by President G.W. Bush on December 20, 2006. Under the guise of modernizing the Postal Service for the 21st Century, it actually costs around $5.5 billion a year.

One of the provisions of the PAEA was to mandate that the Postal Service fully pre-fund future retiree health benefits for the next 75 years, and to do it within a ten-year window. This means that the Postal Service is required to send to the U.S. Treasury $5.5 billion each September 30. Remember, this is to pay for the future retirement health benefits of people who haven't even been born yet. The Postal Service is the only entity that is mandated by law to do this. No government agency, corporation or organization is required to fully pre-fund future retirees' health benefits.

The BIG LIE is working, most Americans believe the Postal Service is on the verge of verge of a financial collapse. This is a half truth! Just another government takedown of something that does work. PS, I do not work for the USPS.

bleeding the cash cow

Postal employees have had their Social Security benefits cut under Clinton, part of their pensions stolen under Bush, and now the federal government is looting future pension funds. This cash cow has been pretty well bled. What will the federal kleptocracy do for an encore? Next time a politician complains about our collapsing infrastructure...

Indeed this is true.

Before this act was passed, the postal service made enough money from their operations to run without debt. If the government had not stepped in to mess with a service that had been fine for 100+ years before hand, they would still be running fine today.

To climb the mountain, you must believe you can.

Recipe for disaster:

Any government entity combined with unnecessary union representation of it's already well paid employees. It will NEVER be in the black!

Conversely, try having UPS or Fedex mail a letter across the country for 49 cents. I'd like to hear how that works out, lol.

The USPS does not take a cent

The USPS does not take a cent of tax money for operations. They are staying afloat just fine from postage. This bleeding is just pensions, and all federal employees are part of it, not just ones that worked for the USPS.

Please come join my forum if you're not a trendy and agree with my points of view.

SteveMT's picture

Bleeding is an understatement.

Michael Nystrom's picture

But it is not, really. It is accounting chicanery

On the part of the federal government. I heard this story from a postal employee at a small post office in Arlington MA that I used to frequent. Back then I was mailing out all those Ron Paul posters I made, so I was in there every day, and got to know the guys there. One of them was sympathetic to Ron Paul. This is what he told me, paraphrased, more or less:

The Post Office, in spite of the news reports, remains a cash cow. It is one of the only government agencies that actually makes money, in spite of the rise of the internet and email, etc.

And that is precisely the problem. Congress has passed a law requiring the Post Office to prefund its retirement account for 75 years! I challenge you to find any organization - private or in the government that funds its pension 75 years in advance.

Without being saddled by that requirement, the PO would be firmly in the black

Anyway, that is what he told me. I looked into it.

Here is a CNBC article that details the issue:
http://www.cnbc.com/id/45018432#.

It does make sense. The rest of the government is starved for cash, so they go after where the cash is.

Where does that 75 years of "prefunded" pension benefits go? I'd bet a large sum of money that it goes into US Treasury bonds, just like with Social Security.

I don't know who passed the law, I haven't done the research. But nothing is ever as it seems.

The WSJ has its own agenda. I'm sure that its constituents would like nothing better than to privatize the Post Office. But I'm still not convinced they have the facts. But then again in politics, it doesn't really matter, because perception is everything.

Peace.

To be mean is never excusable, but there is some merit in knowing that one is; the most irreparable of vices is to do evil out of stupidity. - C.B.

SPOT ON. They were

SPOT ON. They were restructured in 2006 with these retirement obligations. All one has to do is look at the charts being provided in this thread to see the correlation.

I'm sure you're right

...regarding the pensions, that the gov is putting that money right back into bonds.

It does seem that the USPS has made good efforts to streamline itself and cut costs where possible, but as they themselves term it in this 5 year business plan, it's an "untenable" situation as long as the current situation exists. It looks like even with theoretical revamping, they would still be losing money, though not in leaps and bounds as is the current situation according to the 5 year strategic plan they have in place, which projects a loss cut down to $.05B in 2017. This is under the assumption legislative changes would allow them to move forward with operational savings. It's a pretty interesting read (granted I haven't had the time to pore over it thoroughly, as I'm ignoring my work duties at the moment).

USPS 5 year plan: https://about.usps.com/strategic-planning/five-year-business...

I still think that privatization of the postal service is a very viable option, but should the pension pre-funding end, it would become far less of a bitter pill to swallow, I'll agree.

DJP333's picture

WOW

the losses are staggering!!

USPS P&L

"It’s not pessimistic, brother, because this is the blues. We are blues people. The blues aren’t pessimistic. We’re prisoners of hope but we tell the truth and the truth is dark. That’s different." ~CW