The American Dilemma and How We Can Fix It

The United States Postal Service is in trouble.  The institution has been a reliable way for Americans to get news from loved ones and of course those bills that we all love to hate, tracing its history back to 1775 and the Second Continental Congress when Benjamin Franklin was appointed the first Postmaster General.

The reason that this oldest of all American institutions is in dire straits are several fold.  Changes in methods of communication are certainly one of them.  We simply are sending far less first class mail than we used to, preferring emails instead.  And new sources of competition have arisen with companies like UPS and FedEx taking some of the USPS’ most lucrative business.  eBay is now the USPS’ single largest client.

If we take those changes and combine them with an institution that is “independent” but must report to Congress for approval when it seeks to make changes to the service it provides, that explains part of the problem.  But the reason that the USPS is in deep trouble is that it is unable to fund its healthcare liability in full as it is required by Congressional mandate to do.  It will default on its next payment – an amount in excess of $5.5 Billion.

There is no other institution or company in the country that must meet the stringent requirement that all healthcare benefits be pre-funded in full.  The USPS must do so because Congress says they must.   Why?  I’m at a loss to answer that question.

If we applied that principle to other government agencies and programs, Medicaid, Medicare and Social Security would all be pre-funded.  We know that they are most certainly not.  In fact, they are all off-balance sheet liabilities which are not even included in our official national debt of $15 Trillion and rising.

The good news, if there is any, is that the Congress has begun recently to pass new legislation regarding the post office.  The 112th Congress has introduced 60 bills  regarding the USPS.  Twenty-six of those bills have already become law.  And what is the underlying theme of these pieces of legislation?  They all deal with the important issue of re-naming existing USPS facilities.  None of them addresses the financial issues that the USPS faces.

What are our elected officials in Washington thinking?  Or are there any people whom we elect who actually engage in that activity – at least occasionally?  I’m printing a copy of this post and will be mailing it to my representative in the House and the two senators from Nevada.  But first I’m going to conduct a little test.

I’m gonna sit right down and write myself a letter – and see if there is anyone left at the USPS who will deliver it.



  1. I’m with you all they way. A lot of my clients use direct mail. The USPS is now offering a service called “Every Door Direct Mail” which may help to boost their volume. It looks like a good move. In the meantime, Congress has to get off their duff and fix the problem they created. I’m afraid they’re going to wait until after the election, like they doing for everything else.

    • You might find the second comment on this post interesting. And I would agree, Congress will do nothing until after the election – which is a major problem not just for USPS but for the country at large.

  2. Regretably the USPS is obsolete. The fax machine, e-mail, and the internet in general have replaced it. It’s only remaining utility is as a local very inefficient, but also very low cost, advertising medium. USPS does nothing that UPS, Fedex and others don’t do better.

    I easily grant that a lot of this has to do with Congressional oversight, which is irrelevant in the marketplace. They can’t (or won’t) innovate, their personnel are for the most part are wildly overpaid, have ridiculous retirement (20 and out if memory serves) and benefits.

    On top of all that, the quality of service has been declining since at least when the mail was removed from the passenger train. In the early 60s you could mail a letter at 4:00pm in NYC with assurance it would reach the addressee in Chicago by 10:30 the next morning. Fedex didn’t exist because the post office had it covered. UPS existed primarily as a high speed, small package logistic service for businesses. Air mail was one day coast-to-coast, and little used.

    The mere fact of removing the mail from the train caused a huge building program for the post office because now they had to pre-sort instead of sorting en route in cars the railroad provided. Which doesn’t even address the difference in cost per ton-mile between rail and truck/air which are considerable. Removing the mail was also the death knell of the long distance passenger train, it never paid it’s way but, it provided enough underfoot to keep the sysem working.

    It’s time to close it down, the Constitution says may, not shall, and it’s broken beyond repair.

    • It’s hard to disagree with your point about the USPS’s obsolescence.

      But until we make the decision to shut it down, we still need to deal with the problems and the deficits it is generating. With Congressional “oversight”, we’re sending a one handed featherweight into the ring against Muhammad Ali.

      • I agree. What we are doing now is simply throwing good money after bad. That’s a very good comparison. I wonder if we could kick it loose completely and find someone who knows how to run a business, much like we did with Conrail after the Staggers Act.

        It seems like the Post Office still runs under government style administration, which may be the problem. yes they have too much infrastructure but with proper utilization that could also be a strength.

        I think a good start would be raising the rates on junk mail, it clogs the system while increasing the deficits, a strong indicator that it is underpriced. But again, Congress.

        In other words, I have no real ideas, and wonder if anyone else does either. But the worst option is what we’re doing now.

      • I’m not sure that either of us has the answer – but at least we’re asking the question. That is more than I can say for Congress.

  3. The Australian Post Office earns most of it’s money now from parcel post and office and general supplies. Why write when you can email and attach.

    • So many of our postal facilities are large but are under-utilized because of the decrease in the amount of mail. Maybe they could use some of that space to create a food court or set up a Starbuck’s and collect rent on the space. Of course, they could also ask their employees to accept a voluntary reduction in salary – but that they can get that past the union seems unlikely.

  4. Now Fed Ex will refine GPS so well, they will parachute your packages from the air to your rural home if you have the right satellite antenna.

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