Sunday, November 15, 2015

Post Office Losses Mount for Taxpayers ... Yet Billions of Dollars in Annual Losses Continue Undiscussed

The politicians are debating lots of things these days. Alas, fiscal sanity isn't one of them.

They aren't bothering to discuss in any serious way the ongoing annual fiscal deficits. Nor are they discussing doing anything about growing the economy or paying off the tens of trillions of dollars in outstanding debts.

That's because it's the beginning of another election season. Accordingly, the emphasis is on the freebies provided by our governing gurus for most of We the People by pledging to force the evil 1% to pay for them. The self proclaimed do-gooders fail to mention that the problem with the freebies approach is that the 1% don't have enough money to pay for the ongoing fiasco. Most important, they don't admit that future Americans will be getting the shaft. Anybody want to buy a bridge in Brooklyn?

So let's consider a few of the 'small potatoes' today, or the $5 billion in losses each year associated with delivering the mail. To the politicians the postal losses are chickenfeed, at least when contrasted with the debt associated with Social Security, Medicare, ObamaCare, the cost of college and student loans. But the continuing postal saga reveals a very important story that apparently nobody in America wants to hear.

The facts are clear. The postal fiasco is hiding in plain sight and offers compelling evidence of our American willingness and tendency to turn a blind eye when the absolute fantasy of government freebies is involved. That has to change and the sooner the better.

Most of us use email and other electronic methods to communicate with each other today. We also use Amazon, UPS and FedEx.

Yet most of us still send and receive mail from the U.S. postal service. It's a six days a week convenience and a seemingly inexpensive one at that. Oh well, just put it on the taxpayer tab, we in effect are saying. Meanwhile, the tab grows bigger each day, week, month and year.

USPS Posts Annual Loss, Though Revenue Rises is subtitled 'Postal service recorded a net loss of $5.1 billion, compared with a loss of $5.5 billion in 2014:'

"The U.S. Postal Service, which has suffered chronic losses year after year, saw costs again outpace income in 2015 . . . .

According to Postmaster General Megan J. Brennan, any business growth and operational efficiencies won't be enough without “the enactment of legislation that makes our retiree health-benefit system affordable and that provides increased pricing and product flexibility.”

For the 2015 fiscal year, the Postal Service recorded a net loss of $5.1 billion, compared with a loss of $5.5 billion in 2014. The agency reported revenue this year of $68.9 billion, up from $67.8 billion. Operating expenses inched up 0.9% to $73.8 billion. . . .

While shipping and package volume climbed 14%, bringing with it added labor costs, first-class mail and standard mail volume fell by 2.2% and 0.3% respectively.

In seeking to keep pace with the digital era, the postal service has been relying increasingly on its package business as e-commerce takes off.

Looking ahead, the postal service expects added pressure on results with the slated rollback of an exigent surcharge that has provided an estimated $3.5 billion in revenue since its inception.

Last month, the agency said it would seek to increase its commercial-package shipping prices by an average of 9.5% and by double digits for its bread-and-butter business of shipping packages weighing less than a pound."

Summing Up

For the U.S. Postal Service, an apparently insoluble existential financial problem gets bigger each year as technology and new methodologies for communicating are here to stay.

But what the heck? It's only a few billion dollars in losses each year on the road to nowhere, so why worry?

After all, in the big scheme of things, it's a trivial amount of indebtedness for us to pass along to the future American taxpayers, aka our kids and grandkids.

Besides, it's not polite to discuss these matters during election season.

And it's always election season.

That said, 'little' things can mean a lot and little problems left unaddressed will inevitably become big ones.

That's my take.

Thanks. Bob.

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