Free Speech 11/03/10

D elivery Six Days A
Week Is What Americans Expect From The United States Postal Service

According to headlines across the country, the United States Postal Service is in dire need of drastic reform to save itself from what some have mischaracterized as near certain collapse. The Postal Service can save itself but not by eliminating Saturday mail delivery that is the proposed panacea for resolving the agency’s financial problems.  Ending Saturday mail service ultimately does very little – saving just 4 percent of costs while cutting 17 percent of daily deliveries and potentially impacting up to 80,000 jobs. Instead of focusing on this dramatic change to America’s mail system, Congress needs to consider larger reforms to the Postal Service’s current
financial model.

The root of the Postal Service’s financial trouble stems from a 2006 congressional mandate that the agency pre-fund future retiree health benefits on an overly aggressive schedule. The mandate requires that the agency pour $55.8 billion from its operating funds into the Postal Service Retiree Health Benefit Fund over a 10-year period. This obligation, which no other public entity or private company faces, has crunched a 75-year obligation into an unnecessarily tight timeframe, resulting in the worst financial crisis in the agency’s history. Without the mandate, the Postal Service would have netted a profit in two of the last three years.

Moreover, reports commissioned by both the U.S. Postal Service Inspector General and the Postal Regulatory Commission concluded that the agency overpaid anywhere from $55 to $75 billion into the Civil Service Retirement Fund since 1971. If that money were rightfully returned to the agency, the Postal Service could eliminate all of its debt, meet the overly aggressive requirement to pre-fund retiree health benefits and be operating in the black.

Congress has the power to make these changes possible simply by correcting accounting errors and freeing the agency from these unnecessary financial burdens that have been turning profits into losses since they were imposed.

Rep. Stephen Lynch (D-MA) has introduced a bill that would properly align the Postal Service’s retirement funding contributions and move to return the overpayment to the agency. This bill is the first constructive step to getting the Postal Service back on track. For a service with a reputation for quality and dependability that benefits every single American, making an overly brash decision with no foundation for being able to effectively change the USPS’s profitability is a reckless, knee-jerk reaction to a problem that merits a more robust solution.

Delivery service is a letter carrier’s first and foremost responsibility to the community and letter carriers on the streets across America know that delivering six-days a week is priceless.  Letter carriers have a pulse on the communities they serve – keeping an eye on the elderly, reporting suspicious behavior and delivering the mail in a timely manner.

Congress must address the underlying financial issues before making any decisions that would so drastically impact service. Certainly the Postal Service must adapt to economic and technological changes, but there is no need for the agency to make such a rash cut as cutting Saturday delivery. Not only would the cut be painful to the individuals and businesses that rely on mail delivery, but it would be needless without Congressional action to remedy the underlying structural problems driving the agency’s financial deterioration.

– John J. Oross, President NALC
Branch 182, Dayton

War Does Not
Produce Prosperity

Many bad ideas go under the rubric “Keynesian economics,” but perhaps the worst is that government spending, no matter what kind,  can genuinely stimulate of an economy and increase the general welfare.

If we have reached the point of seeing war as a source of good things, it is time to check our premises. Right away we see that if the government pays people money to make war materiel, private entrepreneurs can’t pay them to make things consumers will want to buy. This is the “broken window” fallacy: being so distracted by the visible “benefits” of a government policy that one overlooks the unseen costs. Government doesn’t create resources; it only moves them around. When government taxes or borrows, it transfers scarce resources and labor from the productive sector to politicians and bureaucrats. The Keynesian will say that since the resources are idle, there is no cost and only benefits from the transfer. That is a shallow response.

Resources may well be idle, but there’s a reason for that. A recession follows a government-produced inflationary boom that misallocates resources by artificially lowering the interest rate. The misled entrepreneurs thus put resources in the wrong places and commit them to the wrong purposes relative to consumer preferences. When the boom ends and the recession sets in, the errors reveal themselves and have to be corrected. That takes time, but government delays the recovery by interfering and by poisoning the investment climate with uncertainty. Who will commit to a long-term project while unsure what tax or regulatory policy might be next month or next year?

Thank goodness we don’t need a war to prosper. Shame on those who say we do.

– Sheldon Richman, Conway Arkansas

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