Can The Post Office Be Saved?

It’s no secret that the United States Postal Service (USPS) hasn’t been the model of financial health over recent years.  Many people blame the electronic age on the fact that the USPS has been losing money recently.

This may be true, but it’s not the sole reason that the USPS has been on the negative side of the news.


The first thing to get out of the way is to understand how the post office works.  Many think of the USPS as a government agency, so the simple thought is that if collecting postage doesn’t make up for the costs of running the USPS, the federal government could just give money to cover the difference.  After all, what’s a few billion more dollars when you’re talking a trillion dollar a year deficit, right?


The fact is that the USPS is a self-funded government entity, meaning that it is required to cover all expenses with operational revenue.  In other words, the government cannot simply allocate money from the annual budget.


Another misconception is that the post office loses money delivering mail and packages.  Actually, this is not true.  From the operational side of things, the post office actually collects enough money to cover costs.  What throws it back into the red is funding pensions for workers.

Ah, pensions.  Always the difference between financial health and financial uproar.  It makes me wonder how companies and governments paid out pensions to so many people for so long yet still stayed in business.  We’ve gotten better and better at doing things, yet profit margins have shrunk so much that pensions are the enemy.

Electronic age

The number of letters, bills, and other assorted items has taken a big fall over the years, as more and more people write letters, pay bills, receive bills, and communicate electronically.  To make up for this, the post office now handles more ‘junk’ mail than ever.


So are we doomed?  Will the post office fall into ruin?  I hope not and what gives me hope is that postal services run by other countries are actually able to make money, even covering pension obligations.   There is hope.

What to do?   

Here are a few things I would do to ‘fix’ or at least modify the Post Office.  Some of these are things that the other countries are seeing work, some are just purely my own ideas.

  1. Cut Saturday delivery – For years we’ve all gotten used to mail coming on Saturday.  When I first heard of this proposal, I was aghast.  Totally against it.  Hated the idea.  That was a few years ago when I was a Netflix subscriber.  I got lots of movies back then and didn’t want to lose a day of movies.  Now, we don’t even subscribe to Netflix, and now that there are so many options that let you stream content online, even this isn’t a big deal.  As to the rest, it never was an issue.  I think Saturday delivery would be missed for about a month, then we’d all wonder why it didn’t happen sooner.
  2. Get better – For letters and such, the USPS has everything locked up as they’re the only ones allowed to deliver these types of items.  Packages are a different story as they have to compete with UPS, FedEx, and the like.  I’ve never been impressed with the USPS.  They claim to have better pricing, but it still seems expensive, plus you have to usually wait in line no matter what time of year.  Add to this the fact that I rarely ever get a package on an estimated date from the USPS.  Whenever I see that a package I’m expecting is being shipped via USPS, I automatically add 1-2 extra days to when it says it’s supposed to arrive.
  3. Reduce the grandfathered mailboxes – In years past, mailboxes would be attached to houses and the postal delivery person would walk door to door delivering the mail.  In newer neighborhoods, you have mailboxes grouped together, allowing for the delivery to be more centralized, increasing the number of customers one delivery person can handle.  For some reason, the older neighborhoods are ‘grandfathered’ in.  This is very quaint, but it no longer makes sense.  The mailboxes need to come off the houses.
  4. Electronic mail – One of the things that European postal services have introduced is secure electronic mail.  The USPS still sees anything electronic as competition and has resisted entry to this area.  Customers could have an electronic mailbox that other customers or companies could deliver to, reducing the reliance on third party email that they hope are secure.  This model has worked in other countries and I see no reason why it couldn’t work here.
  5. Be more efficient – Many processing centers are old and require manual work, thereby cutting efficiency.  Investment and upgrades need to happen to allow for faster processing with lower costs.

Improvements have to be made to keep the Post Office from sinking further in the red.  It’s not hopeless and I think just a few of the ideas as well as others that I’m sure are out there can help.

What do you think of the Post Office?  What can be done to return and keep the USPS to solid financial ground?

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We Barely Had Road Construction Delays This Year…And That Sucks!

We’ve done a lot of roadtripping with the new (to us) camper this year.  We’ve been to four state parks.  In addition, we’re currently up for a week at a rental cottage, and next month we’ll be celebrating our five year anniversary by hitting a couple of touristy cities.

We’re happy to be doing all of this traveling in the great state of Michigan.  Our state hasn’t gotten a lot of great press over the years, but it is a beautiful place.  We have access to lakes everywhere.  The Upper Peninsula, or U.P. as it’s known, has miles of beautiful forests and lakes.  Visiting just a few of these places has been great.

And it’s been a little too easy.

For many years, the joke was always that there were two seasons in Michigan: Winter and Construction. If there wasn’t snow and ice on the ground, there were orange barrels.

This year, with all of our travels, we’ve hit very few of them.

This is a good thing from the aspects of fuel, time, and avoiding keeping two kids in the car any longer than we have to.

But, there’s a downside: It means our roads are getting older and more worn out.

In the 1990’s our governor made a pledge to have 80% of the roads in ‘Good’ or better condition. This promise was put into place and allowed for a tax increase at the pump, where there was a 19 cent per gallon gas tax (that was raised from something like 10, if memory serves).  This brought in a lot of extra money and the roads steadily improved.

All was well until inflation hit.  The problem with a flat per-gallon tax is that it never went up.  Back when that tax was put in, gas was around $2 per gallon.  Now, it’s closer to $4 and the $0.19 stays the same.

The $0.19 also doesn’t go as far as it used to.  Everything costs more than it did in the 1990’s. including roads. So, the pool of money that the tax brought in was able to fund fewer projects each year.

Oh, and about that pool, it actually started going down.  A lot.  Two reasons: Michigan started seeing population loss, meaning there were less people to fill up.  That, and cars started getting a lot better fuel economy, meaning that people required less fuel.

All that has contributed to a lot less road construction.  Those days of 80% of roads in ‘Good’ condition is long gone.  So, we have to figure out a way to start all over again.  In fact, the situation is so grim that we may lose federal funding.  See, the feds will kick in a good chunk of money as long as the state comes up with a certain amount.  With that requirement inching up and our revenues inching down, we could lose even more federal matching.

That would be bad.  Our governor actually brokered a deal where we have a second bridge to Canada being built that the Canadians are paying for.  And, even though they’re paying for it, the costs will be considered ‘expenditures’ for the purposes of federal matching.  Meaning, for at least the next couple of years, we’ll be able to use Canadian money to help the money flow in from the feds.

Still, the system needs to be fixed.

I love driving without all the orange cones, but at the same time I realize that if those cones don’t start reappearing, it’s going to mean bad things for our infrastructure.  So, I may be the only person in the world saying this, but I’m hoping that this lag in construction is only a temporary thing.

How are the roads where you live?  Have you seen any slowdown in construction activity?

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Have We Learned From Our Past….Successes?

Those who cannot remember the past are condemned to repeat it.
George Santayana

Most people have heard of that saying, particularly when it comes to politics.  Many politicians are accused of failing to learn from past mistakes, only to repeat them with just as bad of results as when the mistake was made the first time.

I wonder, then, if the same holds true for our successes.  Do politicians take the opportunity to learn from things that actually went well?

I ask with one man in mind.

President Bill Clinton

History has been very kind to the former president.  When he was in office, it seemed that more attention went to things like his philandering, his weight, a referendum on his presidency that led to the biggest Republican sweep in the House and Senate than had been seen in decades, and even his potential impeachment.  Things did settle down as his presidency went on, but now that he’s been out of office for roughly twelve years, most of his sins are behind him, and he seems to command respect from Democrats, Republicans, and foreign leaders alike.  He has become somewhat of a statesman.

I believe that one of the reasons that he is now looked upon more favorably than when he was in office is because he was the last president to see an actual budget surplus.

Yes, there were several years under President Clinton that we did not run deficits in the hundreds of billions or trillions of dollars.  No, we actually paid down some of our debt.

I think they even turned off the debt clock for a couple of years as the number was going backwards.

Now, our deficit is spiraling, hitting over a trillion dollars a year if memory serves.

That’s a mighty big change in just a decade and then some.

Now, I doubt that anybody would suggest that President Clinton was fully responsible for those surpluses, but he was there and he was the man in charge, so history definitely looks back on those days with a different regard, especially when looking at the situation that we’re in now.

I wonder, though, do any politicians in office today, from President Obama to Speaker of the House Boehner to any of the other hundreds of men and women who make our policy decisions (including the deficit) actually take a look at the budgets from those days?

When I get my tax returns back, the account who prepares them gives a three or four year summary, showing how things have stacked up on the income and on the tax side.  This lets us see how things have changed.

I would certainly hope that politicians do a similar thing when preparing our budget, but my guess is that they only do a year or two.  But, do you think any of them put a side by side comparison between today’s budgets and the surplus budgets under President Clinton?

I bet they could learn a lot, if they did.

Now, I get that a lot has changed.  We have expenses such as an increased Homeland Security budget that came about after the 9/11 attacks.  Somewhat tied to that we have a couple of wars that we can’t seem to wind down.  I’m sure that health care costs are a lot higher, and likely Social Security and unemployment.

Still, I wonder if something could be gleaned from doing a what-if scenario.  What if we were taxing and spending in the late 1990’s as we are today?  What would our budget and economy have looked like compared to what it was?  Similarly, what if we did change all the percentages from the 1990’s and apply them to today?  On paper, it could open a lot of doors.  We certainly can’t change things that drastically, but what if it created some insight, some opportunity to apply some of the things that were successful that we’ve perhaps lost sight of over the last 12-15 years?

Isn’t it possible?

I think that many politicians don’t want to look to the past, because they want to be seen as innovative, as thinkers, as doers, and not just as repeaters.

But when we’ve got a President that sat through that successful period, and others that are alive (and likely some still serving in office), why not take the opportunity to learn from the success?

Or are politicians afraid of success, too?

Do you think there are opportunities to learn from the days of budget surplus?  Does it seem like that long ago?

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What’s The Lowest Stamp Price You Can Recall?

I don’t know how I missed it, but I guess last month the US Post Office announced that they want to institute a five cent increase in stamps.

This would bring the price of a first class letter to a cool fifty cents.

by jurvetson, on Flickr

Changes are definitely needed at the Post Office, which has been hemorrhaging money and is facing something like fifteen billion dollars in losses.

Personally, I think structural changes are the only thing that can save the USPS.  As prices rise, I think you’ll find that people will just send less in the mail, so revenue won’t increase as much as they are hoping, if at all.

I thought it would be fun to ask readers where they first remember the price of postage.

The cheapest stamp price I remember was twenty cents, which according to Wikipedia, was the price between November 1981- February1985.  I was anywhere between 7-10 during this time, so that seems about right as to when I would have had an awareness on this particular price.

What’s the earliest memory you have of postage prices? Would a five cent (11%) increase cause you to send less mail than you do today?

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