Tuesday, November 22, 2011

The Fake USPS Crisis

Here's a bizarre one. You hear how terrible the US Post Office is. They lose tons of money supposedly. They operate at a loss. Government is terrible at everything. They should be abolished and privatized (even though it is explicitly authorized in the Constitution).

But have you heard why it is they are losing money?. In an absurd move Congress passed a law that mandated that the USPS prefund pensions, including health benefits, out for a full 75 years. And they had 10 years to do it. This means funding pension liabilities for people that not only don't work yet. We're talking about liabilities for people that haven't even been born. That's $105 billion in 10 years. On top of that none of this money applies to current retirees. That's additional funding that is required. Almost no large businesses could have a burden like that imposed on them and survive.

And here's another kicker. The USPS previously operated under a retirement plan called the Civil Service Retirement System. Since then a different system has replaced it. But the Post Office overpaid into the CSRS to the tune of $82 billion. The US Treasury has not refunded the money. If the USPS could get their hands on the money that is due to them then that, combined with the money they've already contributed to the 75 year forward retirement fund covers the requirements and the USPS operates in the black.

Democracy Now covers it here. Ralph Nader has some details here. What we are dealing with here is elements acting on behalf of private wealth and profit seeking, like AEI, are seeing to it that the rules are rigged so the USPS can't function. Then when they don't function they point to them and act like they are defective. Then they can be privatized.


Miles Rind said...

"Democracy Now covers it here": the link that you provide is to the Wikipedia article on the US Postal Service.

Sheldon said...

And now they are shutting down rural post offices. If there is any justice, conservative rural people should turn on the right-wing over this, but first they have to be educated about it.

Jon said...

Thanks MKR, it's fixed now.

sallen801 said...

This is nothing new. UPS and FEDEX are alive today, because of terrible decisions made by greedy and inexperienced USPS bosses over the years. Before there was TOO BIG TO FAIL, there was the US Post Office.........when times are hard, people take notice, but it is too late. Downsize and Outsource.

sallen801 said...

Don't get me wrong. I ship a lot though the USPS, but it once again, will be raiseing rates in 2012. Like I said, UPS and FEXEX are alive today, because of USPS incompetencies. They saw a blouted, poorly ran system and started their own, "streamlined and profitable" version of the USPS. They did to the USPS, what Toyota did to Chevolet in the seventies.