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The U.S. Postal Service Nears Collapse (USPS)


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The U.S. Postal Service Nears Collapse (USPS)

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  #1 (permalink)
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No worries, the recent Union contract they signed will keep them very competitive.

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I hate for a lot of people to lose their jobs. But... let it "collapse". It's an outdated way of doing business. I would be perfectly fine if the number of spam advertisements, I mean junk mail, was curbed in my mailbox - so why not start by doubling the cost to send such mail.

That would then surely impact the total mail volume quite dramatically, reducing it I mean --- so then go ahead and just deliver mail to my neighborhood three times a week instead of six.

Drastic changes are required for desperate times.

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The obvious solution is not even mentioned in the article. Just shut the post office down and allow private companies to compete in delivering first class mail. Of course you would probably no longer be able to send a letter to alaska for the same price as sending it across town, and half a million well-payed postal employees would no longer get cushy jobs subsidized by the rest of us. But would that really be such a tragedy?

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The obvious solution is not even mentioned in the article. Just shut the post office down and allow private companies to compete in delivering first class mail. Of course you would probably no longer be able to send a letter to alaska for the same price as sending it across town, and half a million well-payed postal employees would no longer get cushy jobs subsidized by the rest of us. But would that really be such a tragedy?

Things will only continue to get worse for them. Obviously the world has reached "peak postal mail" a while back. They've got to fire a ton of people and scale back operations.

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I'm not worried about it to much, my neighbor has pigeons I can use.

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The obvious solution is not even mentioned in the article. Just shut the post office down and allow private companies to compete in delivering first class mail. Of course you would probably no longer be able to send a letter to alaska for the same price as sending it across town, and half a million well-payed postal employees would no longer get cushy jobs subsidized by the rest of us. But would that really be such a tragedy?

I agree with most of that. There is a national interest in keeping SOME of the Post Office functions Federalized.

For instance, during the anthrax scares, a totally privatized system might have responded differently. There's a sense of duty and obligation that comes with being a government worker that isn't present with private citizens. The post office also serves vital functions overseas for soldiers and servicemembers that privatization may or may not be willing to take on.

I'm not saying we should continue to subsidze the ENTIRE postal system, but there are some core/basic functions that need to be in the hands of the Federal govenment for times of crisis and for very abnormal services.

I think the bigger and better solution would be to dissolve the postal union agreement and allow the Post Office to adapt/change with the market better. The Post Office is already using a great deal of private contracts to make themselves more efficient. Without the burden of the union contract they'd be able to use that feature even more.

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As mike points out, it would be easy to solve by raising the price 300% to send mail.
I imagine the problem with that is it essentially would be a tax on old people and no politician is going to want to touch that.
It is a pretty absurd economic waste though that we largely subsidize companies sending me paper that I immediately toss in the garbage.

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Maybe if they shut down on Saturdays,that would be a start. Also most of the mail they deliver is spam/advertisement. Like alot of government enterprises alot of ineff/waste/bloated bureocracies.
Markets change,you have to change to or become a dinosaur.

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The U.S. Postal Service, facing insolvency without approval to delay a $5.5 billion payment for worker health benefits, will suspend contributions to an employee retirement account to save $800 million this year.
The Postal Service will stop paying employer contributions to the defined-benefit Federal Employees Retirement System, which covers about 85 percent of career postal workers, it said today in an e-mailed statement. The $115 million payment, made every other week, will stop on June 24, the statement said.
Suspending payments to the retirement account will help “conserve cash and preserve liquidity,” the statement said. The agency estimates it has overpaid by $6.9 billion and has asked Congress to pass legislation to return that money.
Congress must “make bold, quick and substantive reforms,” said Art Sackler, executive director of the Washington-based Coalition for a 21st Century Postal Service, which represents corporate mail customers. “The USPS is hanging by a thread.”
The agency and U.S. Office of Personnel Management will ask the Justice Department’s Office of Legal Counsel to analyze the decision, said David Partenheimer, a Postal Service spokesman.
“Regardless of the outcome of the Office of Legal Counsel review, the Postal Service believes there will be no impact on employees,” Partenheimer said in an e-mail.
Union Plans ‘Every Step’

Congress “must act now” to correct pension inequities, and the American Postal Service Workers Union “will take every step necessary” to protect retirement benefits, President Cliff Guffey said in a statement. The postal union, the world’s largest, said it represents 220,000 workers and retirees.
The Postal Service has 563,402 career employees and 469,401 retirees, Partenheimer said.
Postal Service Inspector General David Williams said in January 2010 that the agency had been overcharged for its pension obligations. The Postal Service had overpaid by $75 billion, and if that was returned, it would create a surplus that could be transferred to a health-benefits fund, he found.
The service wants the authority to reduce pre-payment of health benefits for retirees and has said it will not be able to make a $5.5 billion payment due Sept. 30 for health benefits for future retirees. It also wants to end Saturday delivery.
The Postal Service reported a loss of $8.5 billion in its 2010 fiscal year. It also reported a widening second-quarter loss, to $2.6 billion, on declining volumes of first-class mail.
The service will continue to transmit employee contributions to the pension fund and will make payments to the Thrift Savings Plan, a defined-contribution federal retirement plan, Chief Human Resources Officer Anthony Vegliante said in the statement.
“The Congress and the administration have left the Postal Service with no other choice,” said Gene Del Polito, head of the Association for Postal Commerce, an Alexandria, Virginia- based group that represents postal customers. “The money’s not there, and they can’t get any more from customers that already are fleeing the mail.”

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NEW YORK (CNNMoney) -- The U.S. Postal Service on Tuesday will release a list of 3,653 post offices that could be shut down.
These locations will be studied for possible closure, according to U.S. Postal Service spokeswoman Sue Brennan. Most of the post offices that are on the chopping block have "lower foot traffic and revenue," she said, and the majority of them are in smaller communities.
In its release, the Postal Service will also outline what it calls a replacement strategy that will have local post offices partner with third party businesses in those smaller communities to create alternative options.
Such arrangements will likely be put in place place in "communities that have existing businesses, mom and pop shops -- some type of local business that could also provide postal services," Brennan told CNNMoney.
The announcement comes as no surprise. In an ongoing effort to battle fiscal concerns, the money-losing U.S. Postal Service announced plans in January to shut down thousands of stations and branches.
In fiscal year 2010, the Postal Service suffered a $8.5 billion net loss, compared to a loss of $3.8 billion the prior year. Last quarter, the U.S. Postal Service posted a loss of $2.2 billion. Its fiscal year ends in September.

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Hmm. Next step is to stop delivering mail on Saturdays, right?

I would be fine with that. The only thing I get in the mail is junk anyway.

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This article has some major flaws in it. By morning and night I am aspiring trader, but during the day I work for a printing company. I’m not claiming to be an expert, but because of my current employment, I keep close tabs on the United States Postal Service (USPS).

The major problem with the USPS is it is controlled by congress. Last year the post master general presented to congress a restructuring program to have the USPS revenue neutral to the over all US budget. None of the measures where allowed to move forward. This included doing away with Saturday deliveries, closing roughly 30% of the post offices, renegotiation the union contracts, and early buyouts.

The reason is plan and simple, members of congress did not want to upset their voters.

I challenge any current CEO of a fortune 500 company to try and run the USPS and turn it profitable. Instead of a board of directors you have to report to congress. Board of Directors are concerned with profit, not getting reelected. The USPS can not be a nimble as FedEx or UPS because of the lengthy delays and own political agendas of members of congress.

Junk mail is the reason why it only cost $0.44 to mail a first class letter. Without junk mail, the cost to send a first class letter would be expediently higher, think FedEx and UPS higher. Additionally, if the USPS closed or rates where drastically increased for junk mail, marketers would be forced to start sending out more email blast and sms, which equals more spam and sms spam. There have been many studies done by marketers as to which way customers would prefer to be contacted, and mail is always the number 1 method. Personally, junk mail is much less intrusive then email or sms.

Besides laying off a half million postal employees, there is the trickle down. In the US, commercial printing (think junk mail and marketing items) is the 3rd largest employer in the manufacturing sector. Most of these companies are small business, less then 100 employees. I can only think of 3 publicly traded companies in this sector. Over half of the commercial printed pieces are mailed solicited and unsolicited. I am guessing you can connect the dots on how this would create some major challenges to printing industry and supporting industries.

Is the USPS in trouble? Yes. Uncouple it from having to have congressional approval and I think they would be just fine. One interesting fact, political campaign mailings (politicians postcards) are mailed at the lowest rate the USPS rate. I believe its equal to or lower then non-profit mailings cost more.

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The US Postal Service warned on Friday that it could default on payments it owes the federal government, just days after the US government itself narrowly averted a default.
The government's mail service said it lost $3.1 billion in the period from April to June, blaming "the anemic state of the economy" and the growing popularity of electronic communications over old-fashioned letters.
As a result of its mounting losses, the US Postal Service said it would not be able to make a legally required $5.5 billion payment in September to a health-benefits trust fund.
"Absent substantial legislative change, the Postal Service will be forced to default on payments to the federal government," it said in a statement.
Dating back to 1775, the US Postal Service was once a crucial branch of the federal government, but in recent years it has come under increasing fire from critics who consider it bureaucratic and inefficient.
In July, it unveiled plans to identify nearly 3,700 under-used post offices around the United States for possible closure. The Post Office has been hemorrhaging billions of dollars in recent years.

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Like I said, it's not excessive wages and benefits that are the real company killer with respect to unions (although that certainly puts them at a competitive disadvantage)....

It's inflexibility and the company's inability to quickly and efficienty adapt to the changing marketplace.

The UAW crippled the Big 3's ability to keep pace with foreign auto manufacturers. Every plant closure, every new plant that's opened, every restructuring and retooling, virtually every personnel change associated with structural changes, has to go through the union.

The irony is that having watched the com. hearings on C-Span about this issue, the PWU claims that it's workers are getting paid "comparable" wages and benefits to the private sector, so my obvious question would be..."then what purpose does it serve." We see it's purpose, to protect jobs at the expense of company competitiveness and effectiveness.

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Hovering on the brink of insolvency, the U.S. Postal Service wants to break its union contracts to cut 20% of its workforce and withdraw its employees from federal worker healthcare and pension plans, according to a Washington Post report published this afternoon.
Without a major financial restructuring, the USPS will be broke by next month, the Post reports. The agency is now seeking Congressional approval to break its labor contracts, which prevent layoffs, and create it's own benefit plan for postal workers.
The USPS has lost $5.7 billion this year and is on track to exceed its projected $8.3 billion deficit. The agency has already stopped making its congressionally-mandated contribution to the federal worker benefit system.
USPS has taken drastic steps to slow its financial hemorrhaging, cutting more than 100,000 positions over the past four years. Last month, the agency announced plans to close more than 3,000 post offices across the country. The Post Master General has also called for halting Saturday delivery. But declining mail volume and rising pension costs have bled USPS dry.
The agency's financial proposals will doubtlessly face intense opposition from federal worker unions. If Congress does approve allow USPS to unilaterally restructure its collective bargaining agreements, the decision could have a widespread ripple effect for federal employees and public-sector workers across the country.


Read more: Postal Service Wants To Lay Off 120,000 Workers, End Pension Plan

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Prime example of government ineptness. UPS and Fedex do it profitably and efficiently. Bureaucrats can't do anything well accept take tax payer money and waste it. Yet they want to take over healthcare.

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I still don't get why government run entities need a union? It makes no sense to me? If someone could show me why then I get it, but considering all the choices one has to find employment, then why is one forced into union laborship?

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I still don't get why government run entities need a union? It makes no sense to me? If someone could show me why then I get it, but considering all the choices one has to find employment, then why is one forced into union laborship?

I think no government entities should have a union. If they don't like pay, or work conditions (both of which are often VERY good), then they should simply go COMPETE in the private sector for employment like the rest of us do.

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There's a huge amount of hypocrisy with pro-union politicians.

Federal politicians don't want unions at the Federal level, because they know that unions are best kept at the state level. That way, they can still get the benefits of union kickbacks, votes and campaign funds, but don't have to deal with unions practically setting up shop in their office and running things like you have with state government unions.

Obama and his staff run their mouth and get involved in the debate about scaling back collective bargaining, but then he turns around and freezes government worker's pay at the Federal level.

We need to feature amendments to constitutions with respect to government unions.

Government unions "negotiate" and "bargain" with the same politicians that they contribute campaign funds toward and the politician negotiates and bargains in bad faith with the taxpayer.

So what you end up with, is a system where the union members, union reps and the politician win and the taxpayer loses.

Similarly, at the Federal level, what you end up with is the entitlement recipient, the government bureacrat, the lobbyist and the politician wins, and the few who actually pay taxes and bear the burden lose.

Brilliant.

Unfortunately, the tax paying, non-union citizens are losing ground (in numbers).

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outsource to China...we cant seem to do anything right anymore!
USPS is a relic as mentioned above,needs to have been streamlined long time agoooo!

You think these clowns can run a Healthcare system? forget about it bro

Watched Ron Paul tonight...I like that guy.

Audit the Fed...step 1 of his presidency.
Stay out of other countries affairs etc.

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There's a huge amount of hypocrisy with pro-union politicians.

Federal politicians don't want unions at the Federal level, because they know that unions are best kept at the state level. That way, they can still get the benefits of union kickbacks, votes and campaign funds, but don't have to deal with unions practically setting up shop in their office and running things like you have with state government unions.

Obama and his staff run their mouth and get involved in the debate about scaling back collective bargaining, but then he turns around and freezes government worker's pay at the Federal level.

We need to feature amendments to constitutions with respect to government unions.

Government unions "negotiate" and "bargain" with the same politicians that they contribute campaign funds toward and the politician negotiates and bargains in bad faith with the taxpayer.

So what you end up with, is a system where the union members, union reps and the politician win and the taxpayer loses.

Similarly, at the Federal level, what you end up with is the entitlement recipient, the government bureacrat, the lobbyist and the politician wins, and the few who actually pay taxes and bear the burden lose.

Brilliant.

Unfortunately, the tax paying, non-union citizens are losing ground (in numbers).

I agree on most counts, the challenge to me is how in the world do you then deal with big corporate money to offset? It is almost as scary or worse in my opinion. At least w/ Unions you do end up with the little guys getting paid instead of just a few guys in the boardroom wreaking havoc and making billions while they do it.

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A NYT article today:
https://www.nytimes.com/2011/09/05/business/in-internet-age-postal-service-struggles-to-stay-solvent-and-relevant.html?_r=1&hp

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The current mail system of the United States is "no longer financially sustainable," and the U.S. Postal Service (USPS) is looking for billions of dollars in cuts to its services.
The postal service announced Thursday it was considering closing nearly 250 processing facilities, cutting equipment by 50 percent and slowing mail delivery in an extreme cost-cutting effort. It is looking for $3 billion in annual savings.
And as the president and Congress search high and low for ways to boost job creation, up to 35,000 people could be laid off as part of that effort.
"We are forced to face a new reality today,” said Postmaster General Patrick Donahoe. “With the dramatic decline in mail volume and the resulting excess capacity, maintaining a vast national infrastructure is no longer realistic."
Since the advent of email and other electronic communication, the postal service has seen a steady decline in its use. More than 43 billion fewer pieces of mail are sent now than they were five years ago. First-class mail has dropped 25 percent, and the transmission of stamped letters is down 36 percent over that time frame. The postage purchased to send first-class mail is a primary source of revenue for the USPS.

The American Postal Workers Union blasted the move.
“The Postal Service should be urging Congress to address the cause of its problems – not slashing service and demolishing its network," union president Cliff Guffey said.
And lawmakers responded to the announcement by repeating their calls for legislative action to help shore up those ailing finances.
"Congress and the administration must act quickly to help the Postal Service save itself," Sen. Tom Carper (D-Del.) said. "Failure to act will result in the Postal Service being insolvent within a year, if not sooner, bringing more pain to communities across the country and wreaking havoc on our already fragile economy."
House Oversight Committee Chairman Darrell Issa (R-Calif.) said it was time for Congress to allow the USPS to act "more like a true business."
"Congress must enact decisive and comprehensive postal reform," he said.
The USPS is expected to hit its $15 billion borrowing limit by the end of September and has indicated it would not be able to make a $5.5 billion payment due at that time. As the USPS seeks to delay that payment until the end of the year, those struggles are driving concerns that the agency could default.

Postal Service faces grim 'new reality' - The Hill's On The Money

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Personally I like the idea of delivering mail every other day, instead of every day.

Does anyone actually check their mailbox every single day? For reasons other than boredom? Like something useful is actually in there??

For people that for some reason need daily mail retrieval (like corporations receiving checks into accounting), they could simply use a PO Box, and all PO Boxes would continue to receive mail daily (they are 1000x more efficient).

I'm also all for the idea of significantly raising the cost of a stamp. Let's just make it 1.50 or something and get it over with.

The real trouble is the bulk mail. The junk mail. I don't know anyone that isn't retired and over the age of 50 that actually looks through that crap anyway. Everyone else just wads it up as the junk is flying everywhere on your walk from the mailbox to your house, and tosses it in the trash.

So those bulk mailer guys will likely go away when the price triples. But that is fine, they need to modernize.

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Big Mike View Post
Personally I like the idea of delivering mail every other day, instead of every day.

Does anyone actually check their mailbox every single day? For reasons other than boredom? Like something useful is actually in there??

For people that for some reason need daily mail retrieval (like corporations receiving checks into accounting), they could simply use a PO Box, and all PO Boxes would continue to receive mail daily (they are 1000x more efficient).

I'm also all for the idea of significantly raising the cost of a stamp. Let's just make it 1.50 or something and get it over with.

The real trouble is the bulk mail. The junk mail. I don't know anyone that isn't retired and over the age of 50 that actually looks through that crap anyway. Everyone else just wads it up as the junk is flying everywhere on your walk from the mailbox to your house, and tosses it in the trash.

So those bulk mailer guys will likely go away when the price triples. But that is fine, they need to modernize.

Mike


I still check everyday and do get more than junk mail (and still read a daily newspaper). I want daily delivery but could live with every other day as you suggest. Ultimately they will have to increase the price as you say but it's just unfortunate.....I guess what bothers me is that while I don't advocate bailouts it would be nice if the post office was helped out instead of the just banks when they where throwing money around.
Remember that 13 billion dollar handout to the banks....they could have given that to the post office instead.
I think you know what I mean...
By the way that junk mail is an important source of revenue for them....a necessary evil that helps keep the cost down for the rest of us.
I of course realize that it is inevitable that the postal service must change.....I just don't like it...

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Everything 'should' be digital. We are using the Pony Express still when we have a nice brand new Jeep to run the mail...

Why can't all things be digital? Let Fedex and UPS etc. fight over physical document shipping etc..

I wonder then if fedex and ups would come down in their pricing model then...

USPS sure is a lot cheaper than the others when shipping to/fro Hawaii.

Imagine a world without junk mailings, envelopes, stamps, etc...

As far as I am concerned the only thing that bothers me about the USPS going under is the people it will impact which obviously will resonate.

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from former U S Representative Alan Grayson regarding the audit of the Fed that he and Ron Paul demanded:


Quoting 
Feel free to take a look at it yourself, it’s right here.

https://www.gao.gov/new.items/d11696.pdf

It documents Wall Street bailouts by the Fed that dwarf the $700 billion TARP, and everything else you’ve heard about.

I wouldn’t want anyone to think that I’m dramatizing or amplifying what this GAO report says, so I’m just going to list some of my favorite parts, by page number.

Page 131 – The total lending for the Fed’s “broad-based emergency programs” was $16,115,000,000,000. That’s right, more than $16 trillion. The four largest recipients, Citigroup, Morgan Stanley, Merrill Lynch and Bank of America, received more than a trillion dollars each. The 5th largest recipient was Barclays PLC. The 8th was the Royal Bank of Scotland Group, PLC. The 9th was Deutsche Bank AG. The 10th was UBS AG. These four institutions each got between a quarter of a trillion and a trillion dollars. None of them is an American bank.

Pages 133 & 137 – Some of these “broad-based emergency program” loans were long-term, and some were short-term. But the “term-adjusted borrowing” was equivalent to a total of $1,139,000,000,000 more than one year. That’s more than $1 trillion out the door. Lending for these programs in fact peaked at more than $1 trillion.

Pages 135 & 196 – Sixty percent of the $738 billion “Commercial Paper Funding Facility” went to the subsidiaries of foreign banks. 36% of the $71 billion Term Asset-Backed Securities Loan Facility also went to subsidiaries of foreign banks.

Page 205 – Separate and apart from these “broad-based emergency program” loans were another $10,057,000,000,000 in “currency swaps.” In the “currency swaps,” the Fed handed dollars to foreign central banks, no strings attached, to fund bailouts in other countries. The Fed’s only “collateral” was a corresponding amount of foreign currency, which never left the Fed’s books (even to be deposited to earn interest), plus a promise to repay. But the Fed agreed to give back the foreign currency at the original exchange rate, even if the foreign currency appreciated in value during the period of the swap. These currency swaps and the “broad-based emergency program” loans, together, totaled more than $26 trillion. That’s almost $100,000 for every man, woman, and child in America. That’s an amount equal to more than seven years of federal spending -- on the military, Social Security, Medicare, Medicaid, interest on the debt, and everything else. And around twice American’s total GNP.

Page 201 – Here again, these “swaps” were of varying length, but on Dec. 4, 2008, there were $588,000,000,000 outstanding. That’s almost $2,000 for every American. All sent to foreign countries. That’s more than twenty times as much as our foreign aid budget.

Page 129 – In October 2008, the Fed gave $60,000,000,000 to the Swiss National Bank with the specific understanding that the money would be used to bail out UBS, a Swiss bank. Not an American bank. A Swiss bank.

Pages 3 & 4 – In addition to the “broad-based programs,” and in addition to the “currency swaps,” there have been hundreds of billions of dollars in Fed loans called “assistance to individual institutions.” This has included Bear Stearns, AIG, Citigroup, Bank of America, and “some primary dealers.” The Fed decided unilaterally who received this “assistance,” and who didn’t.

Pages 101 & 173 – You may have heard somewhere that these were riskless transactions, where the Fed always had enough collateral to avoid losses. Not true. The “Maiden Lane I” bailout fund was in the hole for almost two years.

Page 4 – You also may have heard somewhere that all this money was paid back. Not true. The GAO lists five Fed bailout programs that still have amounts outstanding, including $909,000,000,000 (just under a trillion dollars) for the Fed’s Agency Mortgage-Backed Securities Purchase Program alone. That’s almost $3,000 for every American.

Page 126 – In contemporaneous documents, the Fed apparently did not even take a stab at explaining why it helped some banks (like Goldman Sachs and Morgan Stanley) and not others. After the fact, the Fed referred vaguely to “strains in the financial markets,” “transitional credit,” and the Fed’s all-time favorite rationale for everything it does, “increasing liquidity.”

81 different places in the GAO report – The Fed applied nothing even resembling a consistent policy toward valuing the assets that it acquired. Sometimes it asked its counterparty to take a “haircut” (discount), sometimes it didn’t. Having read the whole report, I see no rhyme or reason to those decisions, with billions upon billions of dollars at stake.

Page 2 – As massive as these enumerated Fed bailouts were, there were yet more. The GAO did not even endeavor to analyze the Fed’s discount window lending, or its single-tranche term repurchase agreements.


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from former U S Representative Alan Grayson regarding the audit of the Fed that he and Ron Paul demanded:

here's another source:


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I read that legislation was passed a few years back that forced the Post Service to make extremely large payments forward into pensions and healthcare benefits for employees who have yet to be hired. . It would seem that without this payment obligation - something no other entities are required to fund similarly - that the net financial position of the postal service would still be positive.

Ulitmately it will probably go the way of milkman, typewriter repair, gas station mechanic, etc, etc. But it seems that someone who is trying to speed up the process. It is still unfortunate that letter writing is could end. It is our oldest form of media. There is still something personal about putting pen to paper and then sending it off that you do no experience with digital transmission as efficient as it is. With letters time slows down for a while. I think we can all use that once in a while. Receiving a handwritten letter to me feels more like a gift. . It is a totally different dynamic. Letters are our true archive of history. Digital records could vanish in a heartbeat.

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The U.S. Postal Service announced on Thursday it's moving forward with a $2.1 billion cost-savings plan to consolidate postal plants over the next two years, with consolidations starting in July.

The cuts will be limited in 2012, with 48 plants slated to be consolidated or closed in July and August, which will only impact 5,000 employees. However, when the plan is fully implemented at the end of 2014, 229 plants will be consolidated or closed and 28,000 jobs will be gone.

To customers, the consolidation plans will mean slower mail delivery for the most commonly sent mail -- but not until 2014. Overnight service is being phased out, but agency officials say letters being sent locally should still just take a day through the end of 2013.

Even with the slower delivery, they say that 80% of first-class mail, which most consumers use, will continue to be delivered on time in 2012.

"These changes are a necessary part of the plan to reduce costs and return the Postal Service to financial stability," said Megan Brennan, chief operating officer for USPS.

Rural post offices spared

Last week, the Postal Service announced it was pulling back on plans to close thousands of rural post offices, saying these post offices would instead offer shorter hours.

The Postal Service also reported a $3.2 billion loss for the three months of 2012 ended March 31, which was due to the recession, declining mail volume and a congressional mandate to prefund retirement health care benefits.

The health care mandate is a major liability for the Postal Service, which doesn't have the cash to make a $5.5 billion payment that's due in August.

Unions say the health care payments are the main cause of the Postal Service's financial problems and should be eliminated instead of plant closures and service delays, which could turn more customers away.

"The Postal Service's actions are the best evidence there is that union members must contact their U.S. representatives and urge them to address postal reform immediately, using the recently approved Senate bill as a starting point for discussion," said Cliff Guffey, president of the American Postal Workers Union.

The Senate plan would spare about 100 plants from consolidation. The House doesn't have such a measure in its bill, which the full House has yet to consider.

Senators called upon the House to move forward on legislation to save the USPS. The Senate plan, which passed last month, would allow the Postal Service access to $12 billion in overpayments in retirement accounts, while postponing health care retirement payments.

"It shouldn't come as a surprise that the Postmaster General is moving forward to reduce costs with the limited tools at his disposal," said Sen. Thomas Carper, a Delaware Democrat and one of the authors of the Senate bill. "Now it's up to the House to pass a bill."

However, the House isn't likely to tackle Postal Service legislation until this summer at the earliest.

The list of 48 plants to be closed in July and August won't be released until later Thursday afternoon, postal officials said.

The Postal Service is, by law, an "independent establishment" of the executive branch. The agency doesn't normally use tax dollars for operations, but it has a $12 billion loan from Treasury to stem the tide until it can get back in the black.


Postal plants to shrink, 28,000 jobs at stake by 2014 - Yahoo! Finance

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(Reuters) - The cash-strapped U.S. Postal Service will offer buyouts this summer to nearly all of its 45,000 mail handlers, part of a plan to consolidate operations at 140 mail-processing facilities in the next year.

The mail agency, which lost $3.2 billion in the first three months of 2012, plans to begin this summer moving mail-processing activities away from smaller sites to reduce annual costs.

As part of that plan, the Postal Service will offer $15,000 in two installments to full-time mail handlers who take early retirement or leave the agency, USPS spokesman Mark Saunders said on Friday.

Mail handlers are workers who load trucks and move mail containers between processing operations. Part-time employees also will be eligible for separation incentives in amounts based on the number of hours they work.

"The agreement with the Postal Service is intended to provide a financial cushion, and added peace of mind, for mail handlers who might be prepared to move on to the next chapter of their lives by leaving the Postal Service," the National Postal Mail Handlers Union said on its website.

The Postal Service has been hit hard by tumbling mail volumes as more Americans communicate online and by massive payments for future retiree health benefits. The agency has asked Congress to let it end Saturday delivery and make other changes. In the meantime, USPS officials have been looking for ways to cut costs.

The agency needs to reduce its workforce by 150,000 people by 2015, Saunders said. Consolidating and closing processing facilities, which will continue through 2014, could eliminate up to 28,000 jobs and save $2.1 billion a year, the Postal Service has said.

Saunders said he could not speculate how many mail handlers would take buyouts this year, but added that the change "will not affect mail service."

The Postal Service also has said it will offer buyouts to more than 21,000 postmasters this year. Postal officials scrapped a plan to close thousands of money-losing post offices and instead, will reduce hours at 13,000 of the nation's smallest offices.


U.S. Postal Service offers buyouts to 45,000 workers - Yahoo! Finance

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Source: The Consumerist The Postal Service Is ThisClose To Defaulting For The First Time Ever


Quoting 
The United States Postal Service is again standing on the edge of disaster with a looming Aug. 1 deadline to escape defaulting. If Congress doesn't do something soon, said a spokesman, the USPS won't be able to make a legally required annual $5.5 billion payment into a health-benefits fund for future retirees.

If it does default, it would be the first time ever in the USPS' long history. Congress probably won't come to the rescue, as the House is preparing to leave for its August recess, notes the Wall Street Journal.

The good news is that a default on the payment, which is for 2011, won't affect services or the agency's ability to pay employees and suppliers. Howcver, "these ongoing liquidity issues unnecessarily undermine confidence in the viability of the Postal Service among our customers," said spokesman David Partenheimer.

It's not just that one little default, either. The USPS says it will also default on the same payment for 2012, which is due on Sept. 30, if it doesn't get help from the legislature by then.

The USPS has been struggling for awhile now, with a loss of $3.2 billion in the second quarter of this fiscal year. It blames declining mail volumes and the 2006 congressional mandate that it set aside those billions of dollars for retirees every year. The Senate passed legislation to overhaul the agency, but the House likely won't do anything similar until after August.

The Senate voted in April for legislation that would return around $10.9 billion that was overpaid into the federal employee pension system and limit the USPS's ability to close branches and stop Saturday delivery.

Meanwhile in the House, Republican leaders support legislation that they claim would have the USPS operating more like a business. That legislation will likely not have a vote before the August recess, said one backer of the bill.

Mike

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I have a friend who is in PO management in Denver and I am afraid to ask him about the situation anymore. The gub'ment had a chance to approve the Postal plan for the end of Sat. delivery months ago and for some reason chose not to (oh I forgot, they don't really do anything of any benefit anymore).

Really, it's easy to envision these guys being out of business entirely in another 10 years. They had a fleet of delivery trucks that they sold to either UPS or Fed Express years ago, for a song .... that is where the business will remain on an ongoing basis.

I used to work there in my kidhood in Chicago, several different times, early and mid 70's. It was a great gig for a semi hippie type ....

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Source: Postal Service to Miss $5.5 Billion Payment to U.S. Treasury - Businessweek


Quoting 
The U.S. Postal Service affirmed it won’t make a required $5.5 billion payment due tomorrow to the U.S. Treasury for future retirees’ health care, an obligation the agency said must end for it to become financially viable.

The service has said for months it couldn’t afford the payment, which was initially due last September, nor a $5.6 billion payment required by Sept. 30 for this year. Postal legislation passed by the U.S. Senate on April 25 would slow the schedule for those obligations. The House hasn’t acted on a different postal measure aimed at changes to help the service cope with declining mail volume.

“This has no effect on mail processing or delivery, no impact on post offices, and employees will continue to get paid,” Dave Partenheimer, a Postal Service spokesman, said today in a phone interview.

The Postal Service, which has more employees than any U.S.- based publicly traded company other than Wal-Mart Stores Inc. (WMT) (WMT), lost $3.2 billion in the quarter ended March 31. It has said it expects to temporarily run out of cash in October unless Congress alters or ends the retiree health-care obligation and lets it make other changes that include ending Saturday mail delivery. The service also wants to withdraw from the U.S. government employees’ health-care plan and set up its own.

‘Willful Blindness’
“The default by the Postal Service on its obligation to its own employees and retirees follows decades of mismanagement, and a willful blindness to fundamental changes in America’s use of mail,” Representative Darrell Issa, the California Republican who is chairman of the Oversight and Government Reform Committee, said in an e-mail. “The Postal Service continues to fail to do all it can under current law to cut costs.”

Issa is a co-author of a postal-overhaul bill that would mandate cost-cutting through measures that include closing post offices and possibly ending Saturday mail delivery. The bill, H.R. 2309, cleared the oversight committee in October and awaits consideration by the full House.

The Postal Service, while critical of elements in both proposals, has said it wants to see them pass so a compromise can be reached by a conference committee.

‘Financial Stability’
“Combining the legislative changes with changes we can make on our own under our current plan is the path we can take toward long-term financial stability,” Partenheimer said.

The service, which receives no direct funding from U.S. taxpayers and is supposed to be self-sustaining, last made a quarterly profit in 2009 and has said it is losing $25 million a day from operations. It has forecast it will lose $9.1 billion in the 12 months ending Sept. 30, not including the $5.5 billion payment.

Mail volume peaked in 2006 and has fallen more than 20 percent since then as much of the service’s first-class mail has been supplanted by e-mail and electronic bills. The Postal Service’s share of the U.S. small-package shipping market fell to 14 percent in 2011, behind United Parcel Service Inc. (UPS) (UPS)’s 52 percent share and FedEx Corp. (FDX) (FDX)’s 34 percent, according to Bloomberg Industries.

The service wants to eliminate as many as 220,000 jobs and close mail-processing plants to reduce costs. It abandoned a plan to shut as many as 12 percent of its post offices after opposition in Congress and instead said it would cut operating hours at as many as 13,000 locations to save $500 million annually.

‘Bogus Default’
The health-care obligation, adopted by Congress in 2006, isn’t necessary as the retiree-payment fund has $45 billion, enough to pay for decades of benefits, Fredric Rolando, president of the National Association of Letter Carriers union, said in a statement.

The “bogus default” shows Congress hasn’t done what’s needed to help the service overcome its woes, he said.

“If we thought our retired members were in danger of losing their health care, we’d be screaming bloody murder about it,” Rolando said.

Mike

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i see it as govt inefficiency.. maybe the private sector could have done it better.. i also am not blind to recognize this as aging and mostly get junk mail anymore as most all bills come and are paid online.. there will always be the ability to send 'whatever' you want to 'whomever'.. might cost you more, but can be done. this is where the private sector might pick up the slack? anyways i wont miss the junk mail and for everything else i send ive done w/o the need of the usps.. i really dont think this is the end of the world..

dont believe anything you hear and only half of what you see

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The US Postal Service is a case study in the ill effects of unions.

Many people feel that unions provide a disadvantage because of non-competitive labor costs.

I found it ironic that the head of the postal worker's union testified before Congress that US Postal workers do not receive appreciably better pay/benefits than their private sector counterparts...(none of the elected representatives were smart enough to ask exactly what the union head's purpose seemed to be, if he was getting paid and the workers weren't getting any benefit over non-union workers).

At any rate, the REAL detriment of unions is the inflexibility that they command. Contract holders and parent companies are not as agile in the market and must seek permission from unions in order to make necessary changes to remain competitive in the marketplace.

That's exactly what we're observing with the USPS. Even though the vast majority of Americans (over 90%) have indicated that they are either in favor or indifferent to eliminating Saturday delivery, the union refuses to allow a reduction in un-needed/unnecessary operations because it would then generate additional retirements, layoffs and/or reduced hours for its workers.

Additionally, the USPS cannot take advantage of short term and temporary cost cutting measures such as outsourcing and contracts. While their main competitors (like Fedex, UPS and DHL) are able to use flexible contracts for operational demand surges, slowdowns, etc....the USPS is stuck placating a union that's more concerned about worker compensation and benefits than the overall health or viability of the organization.

One of the steps in "Good to Great" is a company's ability to "accept the cold hard facts." The fact is that electronic communications and correspondance have obliterated the need and volume for 1st Class mail. Additionally, advertisers are shifting more and more to social media and other forms of less expensive advertising. The vast majority of mail volume at this point comes by way of "junk mail" which is either non-essential or neutral in use/need to most Americans.

I personally watched the committee hearings on CSPAN and I couldn't help but choke to hear the emotional, tear jerking stories by representatives about how selfless postal workers brave the heat and cold and vicious dogs to deliver our mail, or how invaluable they were during "disasters" such as the Anthrax scare. Typical politics....emotionalize and humanize the issue so that if you're in favor of cutting USPS resources, it's a direct attack on the hard working postal workers themselves, not the overall health, viability or competitiveness of the organization and certainly not the value to taxpayers.

If the USPS continues to ignore market realities and enslave themselves to union demands, then we should call a spade and spade and declare that USPS funding is at least in part, social welfare, and not designed to benefit the taxpayers at large, but the postal workers primarily.

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Source: Insolvent US Postal Service Loses Whopping $5.2 Billion In Third Quarter, 70% Higher Than Year Ago | ZeroHedge


Quoting 
Update: USPS STILL EXPECTS TO RUN OUT OF CASH IN OCTOBER - well, this is the bailout request that Draghi was waiting for. All your ECB - get involved.

The epic collapse of one of the most bloated government institutions continues at a ridiculous pace. From Bloomberg:

U.S. POSTAL SERVICE LOST $5.2 BILLION IN THIRD QUARTER
POSTAL SERVICE LOSS Q3 COMPARES WITH $3.1 BILLION LOSS YEAR AGO
POSTAL SERVICE 3Q REVENUE FALLS TO $15.6 BILLION FROM $15.8B
POSTAL SERVICE `LIQUIDITY CHALLENGES' REMAIN IN 2013
POSTAL SERVICE MAIL VOLUME FALLS 3.5 PERCENT IN THIRD QUARTER
POSTAL SERVICE WILL CONTINUE TO PAY EMPLPOYEES, SUPPLIERS
And it gets better:

POSTAL SERVICE LOSS INCLUDES SKIPPED PAYMENT TO TREASURY - in other words the taxpayer bailouts of the USPS have begun... and the loss would have been even bigger.
The punchline:

POSTAL SERVICE WILL `NEVER' CEASE DELIVERING MAIL: MARSHALL
Of course: why ever stop doing something that is losing tons of OTHER PEOPLE'S MONEY. Not like that money is your own.

Finally:

USPS has said it would run out of cash in Oct., assuming it wouldn’t make $11.6b in required payments to the U.S. Treasury for future retirees’ health-care costs
Congress recessed this month without passing legislation Postal Service said it needs to survive
Perhaps it is time to consider a Solyndra-USPS merger: who wouldn't want to see solar powered stamps?

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The best solution is to privatize the post office.. Split it up between UPS and FEX-Ex or equivalent..
The Government produces NOTHING, it is an EXPENSE... Just like a family budget, when times are tough, you CUT expenses.
80% of Government could be eliminated and no-one would notice the difference, except we would have a balanced budget and a much better economy....
As Ronald Reagan once said : Government isn't the solution, Government is the PROBLEM...

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sptrader View Post
The best solution is to privatize the post office.. Split it up between UPS and FEX-Ex or equivalent..
The Government produces NOTHING, it is an EXPENSE... Just like a family budget, when times are tough, you CUT expenses.
80% of Government could be eliminated and no-one would notice the difference, except we would have a balanced budget and a much better economy....
As Ronald Reagan once said : Government isn't the solution, Government is the PROBLEM...

Although that's one solution, I think a better solution would be to simply remove the monkey from their back. I was fairly impressed with the leadership of the Post Office when watching their testimony on CSPAN at a Congressional hearing. Their problem is simply that they cannot make the tough choices they need to make in order to remain viable with a changing marketplace.

I do see a very small need to have the Post Office remain public for catastrophes and disasters....mail is a very vital function in our society and I'd just want to make sure that by privatising it, we wouldn't be losing that crucial capability in times of national or local crisis. Perhaps the private sector can and would still operate during those times, but we'd need to make sure of it.

The biggest detriment of the Post Office is the union. The USPS knows what it needs to do to remain solvent and viable, they simply cannot.

"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
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At the end of this month, the U.S. Postal Service takes another step toward insolvency.

On Sunday, the service is required by law to pay the federal government $5.6 billion to fund health care benefits for retirees. But it won't do it, because it doesn't have the money. It will be the second time that the service has defaulted on a payment, the first occurring on Aug. 1.

For the time being, the default means little. "This default will have no effect on the processing or delivery of mail, and employees and suppliers will continue to be paid," said David Partenheimer, a spokesman for the Postal Service.
But if Congress does nothing, come next spring, the Postal Service will truly start running out of cash. That means the agency may not have enough to pay mail carriers and subcontractors, which could mean drastic cuts to the mail delivery system -- postal service Armageddon.

The financial crunch is due to a law passed in 2007 that only Congress can fix. Congress ordered the prefunding of retiree benefits, as a way of easing federal deficits. Neither of the bills moving through Congress completely undo that mandate -- they just prolong or delay it.

But unions, in particular, blame Congress and the prefunding mandate for the default, which they call "bogus" and "manufactured." They want Congress to repeal the mandate.

"This 'default' is not a crisis. The Postal Service already has set aside $45 billion for future retiree health benefits -- more than any other organization in America and enough to pay for decades of future retiree healthcare," said National Association of Letter Carriers President Fredric Rolando. "The payment in question results from an unnecessary congressional mandate -- an obligation not required of any other company or agency in the country."

Congress has made it clear that it won't help the Postal Service until after the Nov. 6 elections, at the earliest.
And, since some of the policy prescriptions are controversial, such as an end to Saturday mail delivery service, postal legislation may not happen until a new Congress takes over in January,

The Senate passed a bill to help the postal service earlier this year. But the House has yet to consider a measure drafted by Rep. Darrell Issa, a California Republican, that has only gone through a committee and greatly differs from the Senate version.

"Come Sept. 30, the Postal Service will be forced to default again -- further eroding confidence in its future and in Congress' ability to provide it with the reforms it needs to save itself," said Tom Carper, a Delaware Democrat who is one of the authors of the Senate bill. He urged the House to pass a bill to "help achieve our shared goal of preserving the Postal Service for future generations."

In a possible sign of cooperation to come, Issa sent a letter to President Obama earlier this month, asking him to consider certain key provisions to help the Postal Service. They including some provisions in the Senate bill, such as temporary relief from the mandate to prepay retiree benefits.

After the default, the Postal Service will be paying close attention to cash coming in from the mail due to the campaign election cycle. The service might run out of cash by mid-October for a few days or weeks before the holiday mail delivery rush picks up, according to an August report by the agency's Office of Inspector General.

The Postal Service has a back-up plan to make sure mail gets delivered on time in the event of a cash crunch, including skipping part of a $1.4 billion payment due to the Department of Labor to fund workers' compensation benefits. So far, the Postal Service is expected to make that payment, Partenheimer said.

Postal Service to default again - Yahoo! Finance

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CNN reporting that the U.S. Postal Service will end Saturday delivery of first-class mail starting in August.

To me, this is a terrible decision. Saturday delivery is one of the only advantages USPS has. It should have eliminated a couple of weekday deliveries instead.

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Source: Postal Service seeks to end Saturday mail delivery - Yahoo! News

AP is reporting that they will still deliver packages on Saturday, but not mail. Good grief.

Just change to delivering three days a week instead of six... Mon/Wed/Fri, done. Who really can't wait an extra day to receive junk mail, which is the only thing that is ever in my mailbox.

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What several people don't understand (aka facts):

1. The USPS is a service, not a for profit organization. When was the last time somebody cried that the US military (also a service) didn't make money? I am sure they cost us trillions, not billions.

2. The USPS has certain obligations (retirement funds) that no other government entity has. Without that payment they would be fine.

3. If you privatize delivery, little places like Nowhere, Nebraska would never get mail or it would cost $15 instead of under 50 cents...

4. Junkmail substitizes the USPS, just like advertisements on free websites. Sure, nobody likes it, but it is still a fact.

Personally I am fine with delivery on every other day (a nice 40% cut in employment), but Mr. Bezos from Amazon would get a heart attack. They have just built huge distribution centers with the idea of next day delivery. Also NFLX DVD users could get a hissy fit. The point is, that several big companies still depend on cheap and reliable everyday mail delivery.

So could the postal service get a haircut and still provide a service quite effectively? Sure. But let's not hold them to standards what we don't expect from other entities....

And private companies can lose a few billions quarterly, there is no insurance against market forces and bad management...

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UPS, FedEx, DHL are available to Amazon when customers are in a hurry.

USPS's specialty is not speed -- but reach, in my opinion. Like your Nowhere, Nebraska example. If someone in Nowhere, Nebraska can't wait the extra day for USPS to deliver, they have several other choices.

USPS should stop trying to complete where they aren't competitive, and just scale back the operations and be good and efficient at where they have an advantage -- reach.

As far as Amazon's distribution centers, the majority of Amazon delivers are via UPS not via USPS so I don't think it would make too big of a difference. And UPS already has "Ground" (cheap) service with a 1-day delivery time if it's within the same zone.

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USPS's specialty is not speed -- but reach, in my opinion. Like your Nowhere, Nebraska example. If someone in Nowhere, Nebraska can't wait the extra day for USPS to deliver, they have several other choices.

Reach and price. Amazon has razor thin profit margins. If shipping goes up, they simply can't compete anymore. I use them a lot and I can wait a few days, so I think Bezos puring money into distro centers was a huge mistake, but time will tell...

I think the cheapest letter price for Fedex was $5+, somebody correct me if I am wrong. That is quite an increase from the forever stamp...

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Pedro40 View Post
I think the cheapest letter price for Fedex was $5+, somebody correct me if I am wrong. That is quite an increase from the forever stamp...

But Amazon isn't mailing letters. To mail a Priority Mail package it's around $5.50 with USPS if it fits in one of their envelopes. Media mail is cheaper, but to my knowledge Amazon doesn't use media mail.

Anything larger than what fits into an envelope, Amazon will ship it via UPS almost always in my experience. Thankfully, too, because my postal carrier is so lazy she tries to cram everything in the mailbox instead of putting it on my porch.

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Here are some more facts:

"Since 1971, the postal service has not taken a dime from taxpayers. All of its operations — including the remarkable convenience of 32,000 local post offices — are paid for by peddling stamps and other products.

The privatizers squawk that USPS has gone some $13 billion in the hole during the past four years — a private corporation would go broke with that record! (Actually, private corporations tend to go to Washington rather than go broke, getting taxpayer bailouts to cover their losses.) The Postal Service is NOT broke. Indeed, in those four years of loudly deplored "losses," the service actually produced a $700 million operational profit (despite the worst economy since the Great Depression)."

The Truth About the U.S. Postal Service by Jim Hightower on Creators.com - A Syndicate Of Talent

"In 2006, the Bush White House and Congress whacked the post office with the Postal Accountability and Enhancement Act — an incredible piece of ugliness requiring the agency to PRE-PAY the health care benefits not only of current employees, but also of all employees who'll retire during the next 75 years. Yes, that includes employees who're not yet born!"

"This politically motivated mandate is costing the Postal Service $5.5 billion a year — money taken right out of postage revenue that could be going to services. That's the real source of the "financial crisis" squeezing America's post offices.

In addition, due to a 40-year-old accounting error, the federal Office of Personnel Management has overcharged the post office by as much as $80 billion for payments into the Civil Service Retirement System. "

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But Amazon isn't mailing letters.

I know, that was a different argument, I might have mixed it in. Let's say you are a company relying on mass mailing. Your cost of shipping just went up 10 fold.... And NFLX can forget about mailing DVDs....

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Big Mike View Post
UPS, FedEx, DHL are available to Amazon when customers are in a hurry.

USPS's specialty is not speed -- but reach, in my opinion. Like your Nowhere, Nebraska example. If someone in Nowhere, Nebraska can't wait the extra day for USPS to deliver, they have several other choices.

USPS should stop trying to complete where they aren't competitive, and just scale back the operations and be good and efficient at where they have an advantage -- reach.

As far as Amazon's distribution centers, the majority of Amazon delivers are via UPS not via USPS so I don't think it would make too big of a difference. And UPS already has "Ground" (cheap) service with a 1-day delivery time if it's within the same zone.

Mike


what's so amazing is those other competing services (FedEx, UPS, DHL, etc.) often down ship through the USPS, on probably high volume, pre-contracted, non-retail (read. heavily discounted) rates for their tracking delivery services.

ever opt for "free deliver" on ohh so many of those online websites?, many of them defer to the USPS as being cheaper than the premium services of the next-day specialists...

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Turns out, NFLX actually saves money with the no Saturday delivery system:

Netflix Mail Costs Go Down With End Of Saturday Postal Service

Kind of makes sense, less delivery, less shipping.....

Oh yes, yesterday the painkiller for dogs arrived from Amazon. It came with USPS....

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DailyTech - USPS Now Says it Won't Cut Saturday Mail Delivery, Blames Congress

Some good comments.

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Amazon starts delivering packages on Sundays in new US Postal Service deal | The Verge

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The shuttingdown of US official government still have effect to all market makers..
It also affecting the companies in america. I think that it will remain same until the US clearly solve their financial problems..

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what I always wondered was how they can operate at such a large loss over such a large amount of time - and then claim they aren't subsidized!

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Eric B View Post
what I always wondered was how they can operate at such a large loss over such a large amount of time - and then claim they aren't subsidized!

They have a loss because the Senate made a mandate for them to produce exceptional retirement back up money that no other business has to make.

When you take away that mandate, they are profitable...

Now check on the US military, how much you get for your money in return...

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Amid a rise in popularity of cryptocurrency, the financially floundering US Postal Service is considering the possibility of adding a bitcoin exchange to its current roster of non-bank financial services.

The USPS Office of Inspector General (OIG) led a webinar last week on bitcoin and other digital currencies to “explore the possibilities” of setting up bitcoin and other digital-currency exchanges at post offices as a means of boosting revenue. The event included representatives of the Federal Reserve Bank of Chicago, Booz Allen Hamilton, and the World Bank, among others, MainStreet reported.

The OIG also discussed the possibility of creating a “postcoin” as a USPS-specific digital currency.

“There were suggestions like if someone made 'postcoin,' 'What would that be?' 'How could that help?' If we were to employ the technology to support post office operations around the world, internationally, how could crypto currency help post offices do their business?" Darrell Duane, a bitcoin consultant who was involved in the webinar, told online digital currency site CoinDesk.

In addition to the webinar, the USPS OIG released a report covering the possible benefits of providing other non-bank financial services, including replenishable prepaid debit cards, savings accounts, and payday loans.

"The Postal Service already provides non-bank financial services like money orders and international money transfers, and many American families could benefit if the Postal Service expanded its offerings," the OIG said in a statement.

Should the USPS decide on entering the cryptocurrency world, it has a built-in advantage considering it is already licensed to provide related services, like money transmitting.

"Around the world, financial services are the single biggest driver for new revenue for postal operators, and the conditions may be ripe for similar success for the U.S. Postal Service," the USPS OIG said. "If just 10% of the money underserved Americans currently spend on alternative financial services were instead spent on more affordable products from the Postal Service, it could generate some $8.9 billion in new revenue."

The search for alternate revenue streams for USPS in an era of relative austerity in the US comes as its core business has conceded much ground to internet based communications. The majority of bills are now paid online, and letter writing has gone down by 25 percent since 2010. The USPS costs the federal government $15.9 billion a year to operate.

Just one day prior to the USPS webinar, New York State’s top banking regulator announced plans to create regulations that will guide virtual currency firms that operate in the state, possibly requiring them to hold a “BitLicense.”

Benjamin Lawsky, New York’s Superintendent of Financial Services, said such regulatory guidelines would seek to bar misconduct like money laundering while not cornering in booming cryptocurrency technology. His comments came during the start of hearings this week - organized by the New York Department of Financial Services - on the future of online currencies.

“Ultimately, it’s our expectation that the information we’ve gathered in this fact-finding effort will allow us to put forward, during the course of 2014, a proposed regulatory framework for virtual currency firms operating in New York,” Lawsky said in his statement, according to MarketWatch.

?Struggling US Postal Service looks to bitcoin for new revenue ? RT USA

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The United States Postal Service has a serious dilemma: How can it survive in the age of email, online banking and a very competitive shipping industry?

The Post Office recently raised the price of a first-class stamp to $0.49 from $0.46 but three extra pennies to send a letter in the mail will have little effect on helping the agency turn a profit. The postal service trimmed its loses in the first quarter of its fiscal year yet the agency still posted a $354 million loss. Total mail volume in the quarter, which ended Dec. 31, fell to 42 billion pieces, down from 43.5 billion in the same period a year ago. The Post Office has lost money in 19 of the last 21 quarters.

Money-saving strategies like ending Saturday mail delivery was rejected by Congress; other major financial decisions that the USPS wants to make are tied to a dysfunctional federal government that cannot agree on much these days.

How about this: allowing the Postal Service, which has branches in many low-income neighborhoods, to offer traditional and non-traditional banking services? That was the recommendation of the U.S. Postal Service Inspector General, who outlined such a proposal in a recent white paper.

"The Postal Service is well positioned to provide non-bank financial services to those whose needs are not being met by the traditional financial sector," according to the report. "It could accomplish this largely by partnering with banks, who also could lend expertise a the Postal Service structures new offerings. The Office of Inspector General is not suggesting that the Postal Service become a bank or openly compete with banks. To the contrary, we are suggesting that the Postal Service could greatly complement banks’ offerings. The Postal Service could help financial institutions fill the gaps in their efforts to reach the underserved."

More than a quarter of U.S. households -- about 68 million adults -- spent $89 billion in 2012 to access costly services like payday loans and check cashing exchanges because they did not have a bank account, the General Inspector noted in his proposal.


"While banks are closing branches all over the country, mostly in low- income areas like rural communities and inner cities, the physical postal network is ubiquitous," the Inspector General writes. "The Postal Service also is among the most trusted companies in America, and trust is a critical element for implementing financial services. With affordable financial offerings from the Postal Service, the underserved could collectively save billions of dollars in exorbitant fees and interest."

"I want this idea to work so much," so Yahoo Finance's Jeff Macke in the video above. "But it won't work because it's a high-risk business. The Post Office won't make money."

The Inspector General estimates that moving into the banking business could net the Post Office nearly $9 billion a year. But there's "a certain irony in the Post Office, cash-strapped and maxed out on credit, looking to elbow in on the business of check-cashing and payday-loan storefronts," Mehrsa Baradaran, an assistant professor of law at the University of Georgia, specializing in banking regulation, argues in a recent NYT editorial. "A note of alarm is raised when it highlights the potential bonanza that providing financial services to the financially underserved could yield."

Can becoming a bank save the Post Office? | Daily Ticker - Yahoo Finance

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The United States Postal Service ended its second quarter with a net loss of $1.9 billion as first-class mail volume continued to tumble and lawmakers remained at odds over providing any financial relief, the agency said on Friday.

The Postal Service's net loss for the fiscal second quarter ended March 31 surpassed the first quarter's loss of $354 million, but it remained flat from the year-ago quarter. It was the 20th of the last 22 quarters that the agency has posted a loss, the USPS said.

The volume of first-class mail, the agency's most profitable product, fell 4.1 percent in the second quarter as more Americans chose to communicate and pay bills via the Internet.

"We're quite obviously in a deep financial hole," Joseph Corbett, USPS chief financial officer and executive vice president, told reporters in a briefing.

Liabilities totaling $64 billion exceeded current assets by $42 billion, adding to the agency's dire financial situation, the agency said in a statement.

In the meantime, its shipping and packaging business remained a bright spot, with volume increasing 7.3 percent as e-commerce grows and more online shoppers need carriers to deliver their goods.

Still, the Postal Service keeps struggling under the weight of heavy mandatory payments into its future retirees' health fund, which was required by Congress in 2006.

The USPS has sought legislative relief to let it modernize its business service offerings, restructure the future retiree health-fund payments and shift to a five-day mail delivery service.

Postmaster General Patrick Donahoe said he was disappointed in Congress' failure to act. He added that comprehensive legislation - not a bill narrowly focused on health costs - was still urgently needed.

The USPS had already factored in the expected loss in first-class mail volume, estimated at 4 billion fewer pieces of mail for fiscal year 2014. The agency lacks the money to upgrade its 23-year-old vehicles and make other needed improvements.

Congress has remained gridlocked on postal reforms, partly by pressure from trade groups and unions to maintain the status quo, as well as due to some lawmakers' reluctance to see postal services cut back in their districts.

Lawmakers pushing postal reform legislation include Oklahoma Republican Senator Tom Coburn, Delaware Democratic Senator Tom Carper, and Representative Darrell Issa, a California Republican and the chairman of the House Oversight and Government Reform Committee.

The U.S. Postal Service, which does not receive taxpayer funds, has said it could require a massive bailout from the taxpayers in excess of $50 billion by 2017 if Congress fails to act.

"The harsh reality is that it's likely we'll continue to see the U.S. Postal Service suffer unsustainable losses that threaten its long-term viability until Congress acts," said Carper, who is chairman of the Senate Homeland Security and Governmental Affairs Committee. "As I've said time and time again, Congress and the administration need to come to agreement on comprehensive legislation that reforms, right-sizes and modernizes this American institution."

https://finance.yahoo.com/news/u-postal-loss-swells-1-142733954.html?l=1

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So Kbit, what is your point? I think we already explained the situation and as your quote says, until Congress changes the incredibly unfair laws against the US Postal service, the losses will continue. That again, isn't the USPS's fault..

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Pedro40 View Post
So Kbit, what is your point? I think we already explained the situation and as your quote says, until Congress changes the incredibly unfair laws against the US Postal service, the losses will continue. That again, isn't the USPS's fault..

No new point just the latest on what's going on. Sorry to bore you with it.

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Post Office is nothing more than a giant spamming machine. I get maybe two things a month via postal that are not spam. Ridiculous post office sells my physical address to spammers then charges the spammers to deliver to my address. I think we could easily survive without US Mail.

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  #65 (permalink)
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liquidcci View Post
Post Office is nothing more than a giant spamming machine. I get maybe two things a month via postal that are not spam. Ridiculous post office sells my physical address to spammers then charges the spammers to deliver to my address. I think we could easily survive without US Mail.

Sorry but USPS does not sell data. The only data they provide is CASS and NCOA. CASS is list of physical delivery addresses. It does not contain First, Last name. NOCA is National Change of address. When you move and fill out one of those cards to forward your mail it goes into a database for 12 months (I think). This data is all provided free of charge. Any company doing a bulk mail must run their data through CASS and NCOA databases to cut down on non-deliverable mail. USPS was losing a lot of money on non deliverable mail.

There are huge data warehouses which buy and sell data as their core business. These are multi million dollar business.

SPAM, junk mail, what ever you want to call it is huge money. Additionally, it is great for creating jobs. Over 20% of printed items are mailed. Printing is one of the last manufacturing industries where most of the jobs have not been shipped overseas. These are decent paying jobs since it is skilled labor.

I know because I sold printing and mailing services for 11 years.

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  #66 (permalink)
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lipton80205 View Post
Sorry but USPS does not sell data. The only data they provide is CASS and NCOA. CASS is list of physical delivery addresses. It does not contain First, Last name. NOCA is National Change of address. When you move and fill out one of those cards to forward your mail it goes into a database for 12 months (I think). This data is all provided free of charge. Any company doing a bulk mail must run their data through CASS and NCOA databases to cut down on non-deliverable mail. USPS was losing a lot of money on non deliverable mail.

There are huge data warehouses which buy and sell data as their core business. These are multi million dollar business.

SPAM, junk mail, what ever you want to call it is huge money. Additionally, it is great for creating jobs. Over 20% of printed items are mailed. Printing is one of the last manufacturing industries where most of the jobs have not been shipped overseas. These are decent paying jobs since it is skilled labor.

I know because I sold printing and mailing services for 11 years.

@lipton80205 Okay wrong on selling data. Either way to result is the same as my mailbox is full of junk everyday. I could care less about jobs being created by bombarding with unsolicited mail. I hate in my email I hate in the mail. Difference is post office is the purveyor of much of it. There should be a form fill out one time at post office that stops all junk mail. But they won't because they make to much money on it.

Here is an interesting article on the post office causing issues for outbox note the quote by the postmaster general below about Junk mailers being the USPS customer.

"But instead, Evan recounts that US Postmaster General Patrick Donahoe “looked at us” and said “we have a misunderstanding. ‘You disrupt my service and we will never work with you.’” Further, “‘You mentioned making the service better for our customers; but the American citizens aren’t our customers—about 400 junk mailers are our customers. Your service hurts our ability to serve those customers.”’

Outbox vs. USPS: How the Post Office Killed Digital Mail (Updated) | InsideSources

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  #67 (permalink)
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Liquidcci, look at it this way, the spamers are supporting your cheap mailing prices. If you think that for less than 50 cents you could mail a letter across a continent, you should start a delivery business. UPS charges like $5.75 for the same...

Most people don't know or understand the issues. Sure there could be some changes like less delivery, but in every country the mail service is an important part of society. Until Congress starts to mess with it...

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kbit View Post
The United States Postal Service ended its second quarter with a net loss of $1.9 billion as first-class mail volume continued to tumble and lawmakers remained at odds over providing any financial relief, the agency said on Friday.

The Postal Service's net loss for the fiscal second quarter ended March 31 surpassed the first quarter's loss of $354 million, but it remained flat from the year-ago quarter. It was the 20th of the last 22 quarters that the agency has posted a loss, the USPS said.

The volume of first-class mail, the agency's most profitable product, fell 4.1 percent in the second quarter as more Americans chose to communicate and pay bills via the Internet.

"We're quite obviously in a deep financial hole," Joseph Corbett, USPS chief financial officer and executive vice president, told reporters in a briefing.

Liabilities totaling $64 billion exceeded current assets by $42 billion, adding to the agency's dire financial situation, the agency said in a statement.

In the meantime, its shipping and packaging business remained a bright spot, with volume increasing 7.3 percent as e-commerce grows and more online shoppers need carriers to deliver their goods.

Still, the Postal Service keeps struggling under the weight of heavy mandatory payments into its future retirees' health fund, which was required by Congress in 2006.

The USPS has sought legislative relief to let it modernize its business service offerings, restructure the future retiree health-fund payments and shift to a five-day mail delivery service.

Postmaster General Patrick Donahoe said he was disappointed in Congress' failure to act. He added that comprehensive legislation - not a bill narrowly focused on health costs - was still urgently needed.

The USPS had already factored in the expected loss in first-class mail volume, estimated at 4 billion fewer pieces of mail for fiscal year 2014. The agency lacks the money to upgrade its 23-year-old vehicles and make other needed improvements.

Congress has remained gridlocked on postal reforms, partly by pressure from trade groups and unions to maintain the status quo, as well as due to some lawmakers' reluctance to see postal services cut back in their districts.

Lawmakers pushing postal reform legislation include Oklahoma Republican Senator Tom Coburn, Delaware Democratic Senator Tom Carper, and Representative Darrell Issa, a California Republican and the chairman of the House Oversight and Government Reform Committee.

The U.S. Postal Service, which does not receive taxpayer funds, has said it could require a massive bailout from the taxpayers in excess of $50 billion by 2017 if Congress fails to act.

"The harsh reality is that it's likely we'll continue to see the U.S. Postal Service suffer unsustainable losses that threaten its long-term viability until Congress acts," said Carper, who is chairman of the Senate Homeland Security and Governmental Affairs Committee. "As I've said time and time again, Congress and the administration need to come to agreement on comprehensive legislation that reforms, right-sizes and modernizes this American institution."

https://finance.yahoo.com/news/u-postal-loss-swells-1-142733954.html?l=1


I sometimes wonder when "they" quote numbers like that, whether that really is business lost or missed, or actually a net negative cash flow against expenses.

All my accounting class training suggests their expenses exceeded their revenues (traditional way of stating such), and this was as stated.

How?, are the taxpayers really funding them to that tune? Doesn't that then become a jobs program?, in its essence.

What would the landscape be like without the postal service?, whether or not it no longer seems high tech and current?

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  #69 (permalink)
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MSNBC "The Ed Show", yesterday concluded with a segment by a representative of either the US Postal Union or another outside agency and he drew light on this subject

he stated that the Post Office has prefunded (according to Congressional approval) tens of millions, if not billions of dollars and shows this "funny accounting loss", so that public opinion will be swayed towards privatizing its operations and selling off its most desirable assets to others...

he also stated that the USPS is net positive of over $1,000,000,000 profitable year over year, and has been so for quite some time...

I searched their website for a direct link to that exerpt and such, but perhaps they have not loaded it up yet. So from time to time, search under "The Ed Show", on msnbc: news, video and progressive community. Lean Forward. and perhaps you too will see that segment and be able to challenge the voracity of his claims.

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kronie View Post
How?, are the taxpayers really funding them to that tune? Doesn't that then become a jobs program?, in its essence.

You could view it as subsidized mail rather than as a job program.

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  #71 (permalink)
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SMCJB View Post
You could view it as subsidized mail rather than as a job program.

@SMCJB

see the quote above about the Ed Show...

in a word, the knowledgable postal commentator said:
1) the USPS made over +$1B above costs
2) the funny accounting that they're subject to within the budgets that both administrations have continued makes it appear as if the USPS were in default and in need of replacement, cancellation or otherwise

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