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Mail is vital to so much of the economy. This horror story is exactly why it’s a good thing for everyone if the country has a well-functioning postal service th

by numair 6y ago

Mail is vital to so much of the economy. This horror story is exactly why it’s a good thing for everyone if the country has a well-functioning postal service that serves as national infrastructure rather than a profit-generating enterprise. But I guess that’s a controversial statement these days. Sigh.

ralph84 6y ago
If it’s vital to so much of the economy it shouldn’t have a problem charging profitable rates.
- Guest42 6y ago
  Research would indicate the rates are profitable as mandated by law. It is irresponsible to spread misinformation on the internet.
  - anonuser123456 6y ago
    I don’t understand the argument you are trying to make. That price controls are good? Or that a national carrier will always be profitable because they can just jack up their rates?
    - drcoopster 6y ago
      USPS is legally required to charge rates that don't result in a marginal loss.
    - MereInterest 6y ago
      The USPS cannot "jack up the rates". The USPS cannot change prices to increase revenue. The USPS prices are set by legislation, and cannot be changed. The USPS is not intended to make a profit, and is intended to provide a public good. Implying that the prices can/should be changed is spreading misinformation.
- dghlsakjg 6y ago
  The USPS is profitable on the delivery side. If they were allowed to operate as a normal business they would have more revenue than Fedex and UPS. Their free flow cash margins have been positive since 2013. They would be VERY profitable except for legislative meddling. However, they have a number of legislative mandates that suck up their profits. The biggest is that they have to have cash on hand to pay out employee pensions for the next 75 years. Everything that they make goes into a giant pot of money for the retirement fund of workers that haven't been born yet. The holdings must be in cash, so they can't even invest this giant pot of money. This was a law pushed through by conservatives with the seeming intent to ensure that the USPS is never profitable. It is a mandate that literally no other organization is saddled with. Other legislative blocks to profitability: They ae required to deliver lettermail to every address in the US for the same rate. They don't get to set the rates for lettermail. They are prohibited from offering additional services through their branches such as copy and print services. They are prohibited by law from participating in banking and money services except for legacy paper money orders. Online service is strictly prohibited. Besides all that, there is no reason that a service considered vital to the economy has to be profitable. The postal service is one of the few essential government services that is expected to make money for some reason. We don't expect the fire department to be revenue positive even though they are allowed to charge basically anything they want for ambulance service. As an anecdata aside: I've lived in a few countries where postal service is less than reliable (don't know when the mail will come, deliverability rates are pretty bad.). It is not a desirable state of affairs. I remember my mom having to plan half a day to pay bills. She would have to go to the office, or an approved payment processor for the company and wait in line to make a payment for each bill. Contrast that with dropping a check in the mail. The internet has changed a lot of things since then, but I still see a mail service as required.
  - thatguy0900 6y ago
    Considering how many public institutions are having pension fund issues I have a hard time being upset that at least one of them is being forced to make sure they can actually follow through with the promises, even if the rules are excessive
  - lotsofpulp 6y ago
maerF0x0 6y ago
IMO it's important to separate the economic infra and the public utility portions of it -- but economies of scale might be had when combined. Some retailer getting their consumer product shipped to a customer is not a problem for the government to solve. Getting medicine to someone in need is. It's hard because on the surface they seem the same, but systems that functions like the former and latter have very different economics (say in the fail case) and their budgets/designs have to match the needs.
throwaway0a5e 6y ago
USPS barely breaks even plus or minus a couple percent any given year while also being financially prudent with its pension obligations and substantial federal oversight that keeps it from doing particularly slimy things to make a buck. All the "hurr durr it should be nationalized" and "hurr durr it should be privatized" noise is just the partisan hacks from both sides doing their thing. It's pretty much fine as it is, even if its service level for parcels is slightly worse than the private carriers
- joshstrange 6y ago
  The day the US military shows a profit I will start to care about the USPS, actually no, I still won't care. It's not a business, it's a service. "partisan hacks", please take your "both sides" and leave, it's not even remotely close to the truth. > substantial federal oversight that keeps it from doing particularly slimy things to make a buck. Could you elaborate on this? I'm sure you couldn't be talking about attempts to let USPS provide basic banking services.
- JJMcJ 6y ago
  > prudent USPS has a pension funding burden that no other entity in the USA operates under. Without that they would be doing just fine.
  - google234123 6y ago
    Why does anyone provide a pension now? 401ks are much more financially prudent.
    - lotsofpulp 6y ago
      It's mostly taxpayer funded entities that provide defined benefit pensions now, since in the US, they are exempt from any laws about setting aside any money for the future benefits. This works well for politicians and senior government employee union members, who can be promised lavish benefits in the near term, at the same time as advertising low taxes to the non government employee voters since they can just make up numbers for how much they need to save to pay the benefits. They won't do it so brazenly as to simply set aside $0 for benefits promised today, but it happens by using extremely liberal discount rates (~8%) to make future liabilities look less than they are. For reference, non taxpayer funded entities are subject to Pension Protection Act of 2006, which requires pension plans to use highly rated corporate bond yield curves, around ~4%. Each percentage increase in discount rate, roughly, makes the amount of money you need to save today 10% to 20% less (since you're assuming greater investment returns). Legislators can also just not pay the recommended amount. For example, in a government pension plan, the actuaries comes back with a funding recommendation of $1B to pay for the benefits accrued this year (which is already understating costs due to liberal assumptions). The leaders or legislators will just say we don't have $1B this year, but let's do $500M, and then amortize the rest over the next 10 years. Maybe the governor or mayor promised no tax increases, maybe they want to push tax increases or budget cuts to after they move onto their next political office. You can keep this rob the future to pay for today scheme going for a few decades while people are having lots of kids and the tax base is growing and income from taxes is growing. But it comes to a head, like it is now, eventually.
throwaway201103 6y ago
For delivery of retail parcels to private consumers? No that should be part of what retailers pay for when they sell remotely. It's a cost of doing business and absolutely not the responsibility of the taxpayers.
- gnopgnip 6y ago
  You could apply this argument to everything the government is involved in as well. Why shouldn't retails pay for the roads we all drive on that lets customers reach them, electricity, police and fire and so on

by numair 6y ago

ralph84 6y ago

If it’s vital to so much of the economy it shouldn’t have a problem charging profitable rates.

Guest42 6y ago
Research would indicate the rates are profitable as mandated by law. It is irresponsible to spread misinformation on the internet.
- anonuser123456 6y ago
  I don’t understand the argument you are trying to make. That price controls are good? Or that a national carrier will always be profitable because they can just jack up their rates?
  - drcoopster 6y ago
    USPS is legally required to charge rates that don't result in a marginal loss.
  - MereInterest 6y ago
    The USPS cannot "jack up the rates". The USPS cannot change prices to increase revenue. The USPS prices are set by legislation, and cannot be changed. The USPS is not intended to make a profit, and is intended to provide a public good. Implying that the prices can/should be changed is spreading misinformation.
dghlsakjg 6y ago
The USPS is profitable on the delivery side. If they were allowed to operate as a normal business they would have more revenue than Fedex and UPS. Their free flow cash margins have been positive since 2013. They would be VERY profitable except for legislative meddling. However, they have a number of legislative mandates that suck up their profits. The biggest is that they have to have cash on hand to pay out employee pensions for the next 75 years. Everything that they make goes into a giant pot of money for the retirement fund of workers that haven't been born yet. The holdings must be in cash, so they can't even invest this giant pot of money. This was a law pushed through by conservatives with the seeming intent to ensure that the USPS is never profitable. It is a mandate that literally no other organization is saddled with. Other legislative blocks to profitability: They ae required to deliver lettermail to every address in the US for the same rate. They don't get to set the rates for lettermail. They are prohibited from offering additional services through their branches such as copy and print services. They are prohibited by law from participating in banking and money services except for legacy paper money orders. Online service is strictly prohibited. Besides all that, there is no reason that a service considered vital to the economy has to be profitable. The postal service is one of the few essential government services that is expected to make money for some reason. We don't expect the fire department to be revenue positive even though they are allowed to charge basically anything they want for ambulance service. As an anecdata aside: I've lived in a few countries where postal service is less than reliable (don't know when the mail will come, deliverability rates are pretty bad.). It is not a desirable state of affairs. I remember my mom having to plan half a day to pay bills. She would have to go to the office, or an approved payment processor for the company and wait in line to make a payment for each bill. Contrast that with dropping a check in the mail. The internet has changed a lot of things since then, but I still see a mail service as required.
- thatguy0900 6y ago
  Considering how many public institutions are having pension fund issues I have a hard time being upset that at least one of them is being forced to make sure they can actually follow through with the promises, even if the rules are excessive
- lotsofpulp 6y ago

maerF0x0 6y ago

IMO it's important to separate the economic infra and the public utility portions of it -- but economies of scale might be had when combined. Some retailer getting their consumer product shipped to a customer is not a problem for the government to solve. Getting medicine to someone in need is. It's hard because on the surface they seem the same, but systems that functions like the former and latter have very different economics (say in the fail case) and their budgets/designs have to match the needs.

throwaway0a5e 6y ago

USPS barely breaks even plus or minus a couple percent any given year while also being financially prudent with its pension obligations and substantial federal oversight that keeps it from doing particularly slimy things to make a buck. All the "hurr durr it should be nationalized" and "hurr durr it should be privatized" noise is just the partisan hacks from both sides doing their thing. It's pretty much fine as it is, even if its service level for parcels is slightly worse than the private carriers

joshstrange 6y ago
The day the US military shows a profit I will start to care about the USPS, actually no, I still won't care. It's not a business, it's a service. "partisan hacks", please take your "both sides" and leave, it's not even remotely close to the truth. > substantial federal oversight that keeps it from doing particularly slimy things to make a buck. Could you elaborate on this? I'm sure you couldn't be talking about attempts to let USPS provide basic banking services.
JJMcJ 6y ago
> prudent USPS has a pension funding burden that no other entity in the USA operates under. Without that they would be doing just fine.
- google234123 6y ago
  Why does anyone provide a pension now? 401ks are much more financially prudent.
  - lotsofpulp 6y ago
    It's mostly taxpayer funded entities that provide defined benefit pensions now, since in the US, they are exempt from any laws about setting aside any money for the future benefits. This works well for politicians and senior government employee union members, who can be promised lavish benefits in the near term, at the same time as advertising low taxes to the non government employee voters since they can just make up numbers for how much they need to save to pay the benefits. They won't do it so brazenly as to simply set aside $0 for benefits promised today, but it happens by using extremely liberal discount rates (~8%) to make future liabilities look less than they are. For reference, non taxpayer funded entities are subject to Pension Protection Act of 2006, which requires pension plans to use highly rated corporate bond yield curves, around ~4%. Each percentage increase in discount rate, roughly, makes the amount of money you need to save today 10% to 20% less (since you're assuming greater investment returns). Legislators can also just not pay the recommended amount. For example, in a government pension plan, the actuaries comes back with a funding recommendation of $1B to pay for the benefits accrued this year (which is already understating costs due to liberal assumptions). The leaders or legislators will just say we don't have $1B this year, but let's do $500M, and then amortize the rest over the next 10 years. Maybe the governor or mayor promised no tax increases, maybe they want to push tax increases or budget cuts to after they move onto their next political office. You can keep this rob the future to pay for today scheme going for a few decades while people are having lots of kids and the tax base is growing and income from taxes is growing. But it comes to a head, like it is now, eventually.

throwaway201103 6y ago

For delivery of retail parcels to private consumers? No that should be part of what retailers pay for when they sell remotely. It's a cost of doing business and absolutely not the responsibility of the taxpayers.

gnopgnip 6y ago
You could apply this argument to everything the government is involved in as well. Why shouldn't retails pay for the roads we all drive on that lets customers reach them, electricity, police and fire and so on