USPS and unreasonable expectations

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webmaster | 08/04/12
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The Postal Service missed a big payment the other day, failing to contribute some $5 billion into the USPS pension fund. This would have been an advance payment on pensions yet to be paid, and while a good idea in theory, was impossible to make in reality.

In fact, most government entities can’t pay their pension obligations in advance. California hasn’t done so, nor have many counties or cities.

The primary reason is that in order to make those payments, the various government bodies would have to raise taxes considerably. Or, in the case of the Post Office, postage would have to be raised a lot or subsidized.

Politicians don’t like to raise taxes, but they do love to make promises. Thus, when pensions were promised, they were promised by pols who knew they wouldn’t be the ones to levy the taxes to pay for them.

Politicians especially don’t want to be responsible for seeing postal rates raised, or post offices closed, because voters expect low postal rates and want even their tiniest post offices to stay open. Members of Congress howl that the Postal Service should be run like a business, but most of them never have run a business, and are talking through their hats.

They don’t realize that guaranteeing delivery of a first-class letter anywhere in the nation for 43 cents is economic insanity. You might be able to deliver first-class letters a few miles away for that price at a profit, or even at a break-even point, but beyond that first-class mail is a losing operation. Yet, Congress refuses to provide a subsidy, and as a result, you can mail a birthday card to your Aunt Jane in Maine for the same price you can send a check to pay for your subscription (bless your heart) to The Madera Tribune.

The Postal Service isn’t entirely blameless for its predicaments, but Congress will forever keep it from succeeding as it could.

 

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