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The Check Will Soon Be In The Mail

The United States Postal Service released its financial report for the second quarter this week, and it’s not pretty.  Fox News reports “The dismal data showed the agency lost $2.2 billion in the second quarter of fiscal year 2011 – much higher than the $1.6 billion in losses posted during the same time frame a year earlier – and may soon be unable to repay its Treasury Department loans.” 

This led analyst Rick Geddes of Cornell University to predict a “giant taxpayer bailout in the next few years, which will dwarf the bank bailouts, since money to the USPS will never be paid back.”  What the heck, we’ll just print up another few hundred billion dollars and bail out the mailmen.  What could go wrong?

The Postal Service concentrates everything wrong with the fusion of government and capitalism into a single example.  It’s a quasi-governmental agency that operates under a number of very strict official mandates.  As Fox News points out, the Postal Service “survives entirely on the revenue derived from its sale of goods and services,” but it operates within a set of legal requirements that make it tough to turn a profit.  In the age of email and Federal Express, the USPS offers a difficult and archaic service that residential customers can’t quite bring themselves to do without, and commercial interests still rely upon

The USPS situation just keeps getting worse.  The bailout menace has been looming on the horizon for quite a while.  The last time I wrote about it, I mentioned the difficulty of sustaining the fantastically expensive benefits won by unionized postal employees during “collective bargaining.”  That’s a problem faced by many public and private operations.  When unions make unreasonable demands of private industries, they either walk away from the union (assuming the government lets them) or go out of business. 

Can the USPS “go out of business?” Constitutionally, yes it can – the government is empowered to run the Post Office, but not actually required to do so.  Politically, it seems rather unlikely the government would allow the Postal Service to fail, even though we’ve completely run out of the money to finance any more “too big to fail” edicts.  We didn’t really have the money to fund the last one.

Defenders of the Postal Service say it could be made solvent by ending mail delivery on Saturdays, and lifting the requirement that it pre-fund benefits for its retirees, a requirement only the USPS is forced to meet.  Could private competitors give us mail delivery on Saturdays at a reasonable price, without the burden of benefit obligations that will become unsustainable again in a few years, even if the pre-funding requirement is lifted?  It seems increasingly urgent for us to find the answer to that question.

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Written By

John Hayward began his blogging career as a guest writer at Hot Air under the pen name "Doctor Zero," producing a collection of essays entitled Doctor Zero: Year One. He is a great admirer of free-market thinkers such as Arthur Laffer, Milton Friedman, and Thomas Sowell. He writes both political and cultural commentary, including book and movie reviews. An avid fan of horror and fantasy fiction, he has produced an e-book collection of short horror stories entitled Persistent Dread. John is a former staff writer for Human Events. He is a regular guest on the Rusty Humphries radio show, and has appeared on numerous other local and national radio programs, including G. Gordon Liddy, BattleLine, and Dennis Miller.

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