Postal Service Climbs Out of Debt

[Sean]

http://news.yahoo.com/s/ap/20051206/...ostal_finances

The Postal Service is in a position not many Americans can claim: debt free. But even a projected surplus won't stop next month's postal rate increase, which the service says is needed to cover a congressionally mandated expense. Once $11 billion in the red, the post office paid off the remaining $1.8 billion of its debt in 2005, postal Chief Financial Officer Richard Strasser said Tuesday. It's the first time the Postal Service has been without debt since it was organized from the old post office in the 1970s. Overall, the Postal Service finished fiscal 2005 with a $1.4 billion surplus on revenue of $69.9 billion and investment income of $86 million, minus expenses of $68.3 billion and interest of $265 million. Strasser said the agency's plan for 2006 was for a $1.3 billion surplus, but a requirement that it place $3 billion in escrow is forcing it to raise postal rates on Jan. 8 to cover the added expense. The price of a first-class stamp will go from 37 cents to 39 cents and other rates will rise accordingly. And since January's increase is needed solely to cover the escrow requirement the agency is expected to announce another increase next year to take effect in 2007, to cover rising costs.

This begs the question: Should the US postal service go private? The Japanese recently did this.

[Capitalist Pig]

Quote by: Sean This begs the question: Should the US postal service go private?

Yes, absolutely. Debt reduction is good news, but the reported surpluses will never be returned to the taxpayers, and as the article states, costs are still rising. This is not the hallmark of a successful enterprise. The Postal Service is a government monopoly, and this is precisely how government monopolies operate. A privatized industry would ensure better service at the same or cheaper rate(s).

I wonder how quickly the USPS will fall back into debt.

[tman_ndsu08]

Quote by: Sean This begs the question: Should the US postal service go private? The Japanese recently did this.

Certainly.

The fact that people who don't use the USPS have to pay for it via taxes is a scam.

[ericsp23]

You all should read up a little bit and not make assumptions. I used to work for the post office, and I can tell you that, for all intents and purposes, it is already private. The post office has not received any taxpayer money in over 20 years. It is entirely self sufficient now, operating off of the money it makes through selling its services. Of course it is still heavily regulated, but from a fiscal point of view it is private.

[tman_ndsu08]

Quote by: ericsp23 You all should read up a little bit and not make assumptions. I used to work for the post office, and I can tell you that, for all intents and purposes, it is already private. The post office has not received any taxpayer money in over 20 years. It is entirely self sufficient now, operating off of the money it makes through selling its services. Of course it is still heavily regulated, but from a fiscal point of view it is private.

Only technically correct.

Rather than the government just giving money to the USPS and having the population complain, they give money to the industry that supports the USPS to artificially lower the costs of it.

A tricky move that makes it appear as if the USPS is self sufficient. I'd like to see them operate without those artificially low costs.

[ericsp23]

Do you have a source for that Tman? I'm not saying you are necessarily wrong, but what you said sounds awful vague. I'm not sure what you mean by "the industry that supports the USPS." It sounds like that could mean just about anything.

[shield772]

I was also wondering what you meant by "the industry that supports the USPS"

[tman_ndsu08]

Quote by: ericsp23 Do you have a source for that Tman? I'm not saying you are necessarily wrong, but what you said sounds awful vague. I'm not sure what you mean by "the industry that supports the USPS." It sounds like that could mean just about anything.

Simple philosophy: UPS and FedEx can't provide a letter mail service because it's too expensive, and yet the USPS can and without tax money. So, obviously, whatever costs are involved with operating a letter delivery service (mailmen saleries, trucks, truck costs, planes, plane costs, pilots, sorters, sorter machines, etc.) are being artificially lowered by the government. There is no other possible explanation. Money doens't just come from no where.

[ericsp23]

The USPS can afford it because the necessary infrastructure was already in place when it was privatized. So in a sense you are correct because that was paid for by taxpayer money. But no new tax money has been spent on the post office since then and it is being maintained strictly by the money they make from the sale of postage.

[shield772]

The US Postal Service can offer the service because they do not have to pay, business taxes, occupational license fees, rent or taxes for facilities, no vehicle licensing or insurance. just to mention a few.

[Capitalist Pig]

Quote by: shield772 The US Postal Service can offer the service because they do not have to pay, business taxes, occupational license fees, rent or taxes for facilities, no vehicle licensing or insurance. just to mention a few.

This sounds like an argument against taxes and license fees, and for an unregulated insurance industry.

[tivodan1116]

Quote by: tman_ndsu08 Simple philosophy: UPS and FedEx can't provide a letter mail service because it's too expensive, and yet the USPS can and without tax money. So, obviously, whatever costs are involved with operating a letter delivery service (mailmen saleries, trucks, truck costs, planes, plane costs, pilots, sorters, sorter machines, etc.) are being artificially lowered by the government. There is no other possible explanation. Money doens't just come from no where.

No, tman... he said EVIDENCE... not ridiculous assumptions that there are billions in "secret" money being funneled into the USPS while everyone looks the other way.

And where is your evidence that UPS and FedEx *can't* provide a letter mail service? Maybe it's not their area of expertise (since regular mail is high volume, low margin, slow delivery, and what UPS does is relatively low volume, high margin, had-to-be-there-yesterday delivery) and so they haven't gone about investing the billions to do it...

Quote by: ericsp23 The USPS can afford it because the necessary infrastructure was already in place when it was privatized. So in a sense you are correct because that was paid for by taxpayer money. But no new tax money has been spent on the post office since then and it is being maintained strictly by the money they make from the sale of postage.

Exactly.

Quote by: shield772 The US Postal Service can offer the service because they do not have to pay, business taxes, occupational license fees, rent or taxes for facilities, no vehicle licensing or insurance. just to mention a few.

Your argument is lost on me, sheild. Your elephant friends and their jackass buddies tax everything in sight. Just because someone is not taxed doesn't mean they should be. What it means is that no business should be taxed. Multiple wrongs don't make a right.

[PatrickHenry]

Well, if the USPS is OWNED by the people of the US, then could it be SOLD and the proceeds used to pay down our public debt? The buyers of the USPS facilities and system could then do what any other business would try to do: make a return on investment. Anybody know what the USPS ROI is?

Such a course may cause postal rates to rise...

[Clarence]

Quote by: PatrickHenry Well, if the USPS is OWNED by the people of the US, then could it be SOLD and the proceeds used to pay down our public debt? The buyers of the USPS facilities and system could then do what any other business would try to do: make a return on investment. Anybody know what the USPS ROI is? Such a course may cause postal rates to rise...

Ding! the right answer if I ever heard it IMO. Conservatives? this is where you're supposed to agree, I think.

[shield772]

privatization of the USPS would certainly cause the rates to go up dramatically, you would also see a dramatic reduction of services especially to rural/poor areas.

[tman_ndsu08]

Quote by: shield772 privatization of the USPS would certainly cause the rates to go up dramatically, you would also see a dramatic reduction of services especially to rural/poor areas.

Not that it matters since everyone uses email anyway.

[tman_ndsu08]

Quote by: shield772 The US Postal Service can offer the service because they do not have to pay, business taxes, occupational license fees, rent or taxes for facilities, no vehicle licensing or insurance. just to mention a few.

Exactly what I was trying to say.

See.

Lets level the playing field and then we'll see how high the USPSs debt runs. Ha!

[shield772]

Why in the name of all that is holy would you WANT to pay more for less when you don't have to? Also as far as government agencies/programs go the USPS is one that actually works.

[tman_ndsu08]

Quote by: shield772 Why in the name of all that is holy would you WANT to pay more for less when you don't have to? Also as far as government agencies/programs go the USPS is one that actually works.

Inefficiently and expensively.

Pure competition would bring down the rates of postage.

[shield772]

below $.37 are you kidding me, it certainly would not it would go way way way way up. and unless you mail something it doesn't cost you anything, like I said a good government service, no taxes, no fees unless you use the system, how could privatization improve on this?