Sign of the times—pay your bills by mail

“Pay Your Bills by Mail,” is a neatly printed bumper sticker on U. S. Postal Service (USPS) trucks, as of summer 2014. A sticker like that does not appear on USPS trucks at the whim of an individual mail carrier. It must be the product of a decision in management of the USPS.

The bumper sticker is a sign of the times. The USPS is losing money, and lots of it, partly because of a decline in public use of first class mail, the most profitable service of the USPS. Post office management must think their bumper sticker exhortation will motivate public-spirited citizens to stop using electronic bill payment and switch back to buying first class stamps to use in paying their bills by mail. As the text message generation would say, “LOL.” 1 It won’t happen, at least not to any significant degree. Electronic bill payment is so convenient. The time it saves must be worth more to everybody than the cost of a first class stamp.

The bankruptcy of the US Postal Service is looming: Will the public miss the USPS if it shuts down?

In Capitalism: The Liberal Revolution (CTLR) it is posited that private enterprise could perform every service offered by the United States of America and the individual states, excepting of course redistribution of income from the more affluent to the less affluent. CTLR posits that income redistribution is an imposition on the American people rather than a service. Furthermore, income redistribution activities are the primary cause of the financial woes of the U.S. and the individual states. All these political entities have promised more than they can deliver. These improvident promises are bankrupting the U.S., the individual states, and the American people.

The financial problems of the U.S. Postal Service illustrate what has gone wrong, financially, with the services provided by the U.S. and the individual states.  The USPS employed 584,000 workers as of the year 2010. 2

It was reported on May 9, 2014 that the U.S. Postal Service (USPS) has been losing money at a rate that foreshadows its total failure, absent further taxpayer subsidies. According to the New York Times, “The financially troubled Postal Service on Friday [May 9, 2014] posted a net loss of $1.9 billion in the second quarter, which ended March 31, the same amount the agency lost over the same period in 2013, postal officials said. . . The agency owes $99.8 billion in benefit payments to its current and retired workers, which includes $16.7 billion of congressionally mandated [current] payments into a future retiree health care fund. The Postal Service has defaulted on the health care payments over the last three years, and postal officials called on Congress to pass legislation to help the agency overhaul its business . . .” 3 [Emphasis added]

“The Postal Reorganization Act of 1970 abolished the then United States Post Office Department, which was a part of the cabinet, and created the United States Postal Service, a corporation-like independent agency with an official monopoly on the delivery of mail in the United States.” 4

If Congress were to impose similar requirements on itself for advance funding of federal social welfare obligations, 5 the U.S. would have to double its annual spending, and increase its annual deficit by at least 350% over the deficit reported for the fiscal year ended in 2012. 6

The USPS has the authority to permit mail delivery by private carriers, who must pay the USPS for the right to deliver mail. “In 1979 the Postal Service authorized [private delivery of letters that] “. . . must either cost at least the greater of $3 or twice what First Class (or Priority) mail service would cost . . .” 7

Since 1979 United Parcel Service (UPS) and Federal Express (FedEx) have been delivering mail, including packages and letters. The business of UPS and FedEx is thriving while the USPS is failing.

In 2006 Congress enacted the Postal Accountability and Enhancement Act, requiring the USPS to prefund retiree health benefits 75 years into the future and to pay all of that money in the next 10 years. In 2012, the USPS lost nearly $16 billion of which $11 billion was because of the Postal Accountability and Enhancement Act of 2006. 8

The USPS could be eliminated entirely, as UPS (founded in 1907) and FedEx (founded in 1971), and other privately owned companies could deliver all the mail the USPS now delivers.  The rationale given for the continued existence of the USPS has been that the post office does something no private company would be willing to do, that is deliver first class mail to every inhabited place in America, no matter how small. However, UPS and FedEx already do this.

For example, UPS delivers to Happy Camp, California, a small and remote town of 1,190 inhabitants 9 in northwest California. Happy Camp is 173 miles from the city of Redding, California which is 3 ½ hours away by automobile and 130 miles away from the city of Eureka, California, which is three hours distant by automobile. UPS delivers to Happy Camp from its base in Redding. There is a post office in Happy Camp, but mail is general delivery, while UPS delivers to the door.

UPS and FedEx probably would not deliver mail everywhere as cheaply as the USPS, which in the year 2014 charged 46 cents ($0.46) for a first-class letter weighing less than one-half ounce. But the USPS cannot do that either and stay in business.

 

 

 

 

 

Notes:

  1. The abbreviation LOL is used in digital communication to mean “laugh out loud” or “lots of laughter,” in response to something amusing or absurd.
  2. http://about.usps.com/who-we-are/postal-history/employees-1926-2010.htm
  3. Quoted from “Postal Service Reports Loss of .9 Billion in 2nd Quarter,” by Ron Nixon, The New York Times, May 9, 2014, http://www.nytimes.com/2014/05/10/us/politics/postal-service-reports-loss-of-1-9-billion-in-2nd-quarter.html?hp&_r=0
  4. Quoted from Wikipedia, Postal Reorganization Act, http://en.wikipedia.org/wiki/Postal_Reorganization_Act
  5. Social Security, Medicare, Medicaid, and other benefit programs
  6. See Capitalism: The Liberal Revolution, chapter 11, “Political Democracy in America,” under heading “Debt,” http://www.capitalismtheliberalrevolution.com/chapter/political-democracy-in-america/ and the 2014 World Almanac and Book of Facts, Federal Receipts, Outlays, and Surpluses or Deficits, 1901-2014, page 59;
  7. Quoted from Wikipedia, Private Express Statutes, http://en.wikipedia.org/wiki/Private_Express_Statutes
  8. See “USPS problems go back to 2006 law,” by Mark Matthews, ABC News, San Francisco, March 1, 2013, http://abc7news.com/archive/9012963/
  9. According to the 2010 U.S. census
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