The (In) Complete Postal Package

By DataAnalytics
Updated 4/26

“The Senate offered a lifeline to the nearly bankrupt U.S. Postal Service
on Wednesday, voting to give the struggling agency an $11 billion cash
infusion while delaying controversial decisions on closing post offices
and ending Saturday delivery.”

Now, you can add another dead-beat, inefficient entity to the ledger of
irresponsible, incompetent organizations surviving on the government’s
(READ: Tax Payer) dole. In fact, ELEVEN BILLION DOLLARS WORTH…
Latest figures show the post office is 12 BILLION dollars in debt with a now
projected debt of 21 BILLION– not 18 Billion by 2016.

__________________________________________________________

Neither snow, sleet or rain can usually stop postal carriers from
delivering the U.S. mail, but critical financial difficulties certainly could.

Now staring straight down the barrel of a projected 18.2 BILLION
dollar loss, the United States Postal Service is seeking approval
to increase the price of a first-class stamp to $0.50 cents, up from
the current $0.45, to try and stave off the inevitable bail out.

Suffering from internal inorganization and fairly inefficient operational
methods with some very antiquated and restrictive governmental
regulations, first-class mail volume has fallen 20% since its peak in
2006 along with a 22% decline in overall mail handling volume since 2007.

usps financial chart

usps financial chart

A key measure shown in the chart above, is the total expense column.
As revenues fell expenses significantly increased, which only serves
to highlight the ongoing inefficiencies within the postal service.
Particularly alarming are the large jumps in the expenses to revenues
from 2009 to 2011.

E-R Spread

E-R Spread

Revenue to Expense mean loss 2006-2011:

  • -$4.28 billion

Aggregate revenue loss 2006-2011:

  • -$5.1 billion

Year-over-Year mean debt 2006-2011:

  • -$2.42 billion

Increase of debt 2006-2011:

  • 83%

While these deficiencies certainly contribute to the continual losses,
it is also partly due from not adapting very well to the more recent
electronic and techno media revolution. The resulting drop off in usage
from 2009-2008 had netted a minus $7 billion dollar drop in revenue.

bill-payment graph

bill-payment graph

Couple these inefficiencies with over paid management, often
problematic unions and so forth and one can see why the post office
is one of the more mismanaged quasi-governmental agencies in the U.S.
It is public knowledge that the postal service has been running huge
deficits for many years now and its viability is in serious question.

In addition to the stamp rate hike, the USPS will be taking further steps
to reduce the massive short-fall of income. This would include cutting
approximately 150k jobs, ending Saturday service and closing up
to 3,500 facilities.

The suggestion of a fully privatized postal system has been brought up
more than ever over the past few years and now in more recent months
and rightly so. But question remains, will the price hikes and cuts be
effective enough to ensure the longevity and sustainability of the postal
service as it exists, without tax-payer intervention…

Well, when I originally published this back in February, I was thinking
that perhaps the debacle that the USPS is, would be able to hold off on
bleeding the tax payer for money.

But two months later, the said  Tax-Payer intervention comes to fruition.
My question is; when will the next bail-out occur and how much more tax payer
money will the postal service steal from the tax paying public?

15 BILLION? 20 BILLION? Does it even matter anymore?

After all, B-B-B- Benny and the Fed will just “Print” up some more of our
Fiat currency to sustain any and all that the government deems necessary.
Never mind that your grandchildren will be on the hook for the insurmountable
debt obligations, for generations to come…

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