What Do Detroit, the Postal Service, and Health Care Reform Have in Common?

Pajamas Media ^ | March 15, 2010 | J. Robert Smith

[KippLanham]

Before casting “yea” votes in favor of a government health care grab later this week, wavering House Democrats may want to struggle out of the left’s ideological fog for a moment and consider the sad, but instructive, tales of the U.S. Postal Service and the city of Detroit. Both are poster boys (excuse me, poster persons) for how government can get almost anything gloriously wrong.

Read more: http://pajamasmedia.com/blog/what-do-detroit-the-postal-service-and-health-care-reform-have-in-common/

[E. Pluribus Unum]

They forgot the public school system.

[newbolt]

The author must not understand basic economics. Cutting out Saturday delivery reduces costs but leaves revenue that same. The same amount of deliveries will still be made in five days instead of six.

[maddog55]

What Do Detroit, the Postal Service, and Health Care Reform Have in Common?

Complete and utter failure.

[muawiyah]

Most people who comment on how utilities should be operated make the same mistake.

This is one of the reasons the USPS was created. In the years leading up to the strike, and then the disaster at Chicago (where mail service ground to a halt) Congress had deferred maintenance costs over and over.

Unless there was a new building where one of their cronies might get a construction contract, most Congressmen didn't care.

Currently USPS is spending more than it gets in revenue. By cutting costs they can bring things into balance.

That, BTW, is what the law requires.

[Neidermeyer]

What Do Detroit, the Postal Service, and Health Care Reform Have in Common?
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Reminds me of a (very funny but racist) joke ... What do the Post Office and Thom McCann have in common?

[muawiyah]

You are not quite on target here, but there is an intense relationship between the "post office" and "Detroit".

Back when it was still the Post Office Department, the Young family were paid Soviet agents. Andrew Young was Detroit's Mayor. His brother was the director of personnel at the Detroit post office.

Whenever the Department of Defense, CIA or other agency had gotten everything out of a defector from the Soviet Bloc and the person had no marketable skills they'd send them to the Detroit post office to work.

This kept the former Soviet types occupied earning a living, and best of all, from a certain perspective, even the KGB could keep tabs on them through the Youngs to make sure they were behaving themselves nicely and not going rogue.

Healthcare actually comes in to this obliquely. Back during the time when William Bolger was Postmaster General, he commissioned an indepth study into whether or not the USPS should become a self-insurer when it came to medical insurance.

The analysts found that it was cheaper for the private sector insurers to continue handling medical care for USPS ~ that the USPS, even though it was the MOST EFFICIENTLY MANAGED federal agency, could not begin to touch what was available in the private sector when it came to medical insurance.

I'm sure you imagined something entirely different didn't you?

[gidget7]

Very true, however they have to face more and more restrictions on the post office, all of which results in less revenue. Stupid govt.

[maddog55]

Years ago America was a much better place then it is today. Common sense and limited government ruled. Today it’s in a shambles due to to much government and not enough common sense.

In 2006 the USPS carried a net income of $900M. In 2008 it was 2.8B in the hole, in 2009 it was 7.2B in the hole and the USPS could be constrained at the end of fiscal year 2011 by the $15 billion statutory debt limit.

$hit happens..

[muawiyah]

Those numbers are meaningless outside the context of the effort to stabilize rates over a 5 or 6 year period.

Some years should show a surplus while others show a loss.

There are a class of mailers who want to have the rates adjusted several times a year. They figure they can work it to minimize their costs. Other mailers demand stability over time since they figure they can minimize their costs that way.

At the moment that's just water under the bridge. When the Democrats decided to nominate Obama that put the entire economy on the skids. The loss of business (and the revenues that go with volume) happened faster than USPS could respond. At the same time they did manage to cut billions in costs ~ and they are preparing to cut even more billions in cost but this time with observable service cuts.

That's the context.

As a start we need a new President and a new Congress.

[ASA Vet]

You will still pay the subsidies in your taxes

The only tax money going to USPS is Congressional reimbursement for their Franked mail, and reimbursement of the difference between non-profit standard mail rate and standard mail regular rate which is a Congressional mandate.

If you'd like that very small amount of Tax money not used, petition your congress critter to eliminate their Franked mail, and eliminate non-profit discounts.

[John.Galt2012]

True. Actually, I support the Post Office, even thru taxes because it is one of the few mandates prescribed in the Constitution. I don’t think postal workers should be allowed to unionize and the prices should be raised to reflect something closer to commercial companies. Also, get rid of the monopoly on first class mail and bring more competition into the game and I think they would be just fine in the long run.