Post Office Ponzi
It is my contention that the U.S. Postal Service (USPS) is a microcosm of the U.S. Government Ponzi scheme and is suffering from many of the same maladies that have befallen companies that offer defined benefit pension and healthcare plans. Unsustainable pay and benefit commitments to employees have been the economic downfall of several high profile companies and even industries. But the USPS is also faced with a sea change in its business model with electronic document and payment transfer shrinking a key revenue source. Plus USPS has to compete with more agile competitors (like Fedex and UPS) that have the advantage of selecting their customer base and product offerings since they do not have the USPS's Government mandate that USPS must serve everybody everywhere everyday (except Sunday).
This deadly combination of 1) pay and benefits spiraling out of control, 2) shrinking business volume, and 3) government mandate of complete service coverage has caused the USPS to lose money every year since 2007. Fiscal year 2011 yielded a loss of $5.1B and in fisal year 2012 they incurred a loss of $15.9B. The Postal Service recently made an attempt to eliminate Saturday delivery to reduce their operating expenses but Congress denied that request. This to me is another example of the Government's inability to deal with spending problems and refusing to face the realities of change. Our Government does not have the ability and/or will to make the hard decisions that free market companies are forced to make to address their financial challenges. It appears that it will take a massive crisis that is impacting almost everyone to force change to happen.
I also find it ironic that Congress has introduced legislation to require that USPS prefund it's healthcare benefit plan when Congress has dipped into the Social Security piggy bank (as I understand it has emptied it) and has only a 7 month forward looking Healthcare Trust Fund. I have also seen reports that the Postal Service has now defaulted on payments into this Congress mandated prefunded healthcare account since it has reached it's debt limit.
The Postal Service is one of the largest agencies of the U.S. Government with over 540,000 employees with employee and retiree pay and benefit costs that are unsustainable for this segment of the U.S. population just as Social Securtiy, Medicare, Medicaid, etc. are unsustainable for the general population. It is just a more clearly defined trouble spot since it is operating as an independent agency of the U.S. Government. Continuing to spend beyond our ability to fund is what is creating this US Ponzi scheme and USPS is a contributor to this problem.
I find it inexcusable that the USPS sponsored the Lance Armstrong cycling team for two reasons: 1) they were spending taxpayer dollars to sponsor a sporting event, and 2) they must have known that they were sponsoring a drug enhanced group of athletes. This sponsorship, in my view, inappropriately enriched Lance Armstrong and his Postal Service team members at taxpayer expense.
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