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skeechan
Ai Otsukaholic
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reply to TelecomEng

Re: Here's a better way to fix the Post Office...

There is always need for a dying business to pre-fund a bloated and unsustainable pension system particularly when its failure would ultimately end up being made whole by the taxpayers.

The USPS can't be trusted to be responsible.


CXM_Splicer
Looking at the bigger picture
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said by skeechan:

There is always need for a dying business to pre-fund a bloated and unsustainable pension system particularly when its failure would ultimately end up being made whole by the taxpayers.

The USPS can't be trusted to be responsible.

If a business knows it is dying what would be the point of pre-funding pensions for people that don't even work there yet? Just don't hire more people. As we can clearly see here, the added burden of pre-funding that far into the future can put a business so far into the red that it is deliberately killed. The post office was not 'dying' before this requirement. They have had their ups and downs like any business but overall they are highly profitable.

@andre2 - It depends on if you are talking about the fund (which considers people's hire dates) or the people (which considers their retirement dates). The law (and my explanation) is addressing the fund. The fund, as you pointed out, was to be financed 50 years into the future (until 2056). That will cover people who retire between 2006 and 2081 (75 years into the future). It is not proper to say the fund needed to be financed 75 years into the future because that would cover people retiring up until 2106. No matter how you slice the numbers, it is a ridiculous requirement that is directly responsible for the post offices' 'losses' since 2006 (two years before the recession started). Revenues were increasing in 2006 & 2007 but the law pushed operating expenses above revenues even in those years. True, in 2008 the recession made it worse but this is a result of the law... not the recession.


TelecomEng

@rr.com
reply to skeechan

said by skeechan:

There is always need for a dying business to pre-fund a bloated and unsustainable pension system particularly when its failure would ultimately end up being made whole by the taxpayers.

The letter carrying side of the business is in decline, but the package side is quite healthy and in recent years has seen a growth trend, so the USPS isn't a "dying business".

The USPS can't be trusted to be responsible.

Based on what facts? Since their pension fund already exceeds projected immediately and medium to long term future needs, you'll have to prove this statement.


skeechan
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Based on the fact that they can't fund their promises while facing a diminishing business. No one believes that if they don't fully fund now, in 10 years when their business has all but evaporated that they would be able to do a pay-go.

I wouldn't care if taxpayers weren't the ones that will have to bailout the union when they go belly up just as they did the UAW.

The USPS can't be trusted just like GM couldn't be trusted, except taxpayers weren't supposed to be on the hook for billions with GM...billions GM still owes while paying out fat bonuses to the very workers that were the beneficiaries of the bailout. I'm not interested in a repeat with the USPS.


CXM_Splicer
Looking at the bigger picture
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All but evaporated?!? So I presume UPS and FedEx are also going out of business?

There is no one to bail out, they have already pre-funded the benefits of the people they currently have working there. 'Fund their promises'?? I am not sure you understand how the post office works, it is not suppose be a mega-business generating billions in profits every year to go to someone's pocket (although many think it should be). If it were, the cost of a 1st class stamp would be double what it is. They are mandated to be revenue neutral and the price of postage reflects that. The current crisis is suppose to be fixed by Congress raising the rates to bring them back to neutral. So why isn't that happening? The rates are being raised minimally, not enough to correct the problem. That is pretty ironic since once the post office has been destroyed and mail fully privatized, 'first class' postage will be well over a dollar.

Just out of curiosity... when they go 'belly up', what happens to all the money in the pre-funded retirement fund of the people that never got hired (or never reached retirement)? That is going to be in the $10's of billions. Maybe we should just give it to FedEx to compensate them for all the trouble they will have to go through picking up the pieces of our failed government system? I am sure that's what Wall St. would say.