No-Fault Default but Not Divorce
You might not want to try this at home especially with your mortgage or student loan payment, but the United States Postal Service will default on a $5.5 billion payment today and plans to default on a $5.6 billion payment on September 1. Despite what appear to be pretty big numbers, the defaults don’t seem to matter because the money is owed – or maybe not really owed — to the US Treasury.
If clarity is important to you, stop now because we are entering the Land of Muddle where spinners and obfuscators abound. Rural Republican legislators are in a particular quandary because they are required to spin in opposite directions depending on whether they are pandering to the fiscally prudent or to those who like tiny hometown post offices. These can even be the same people.
Much of the Muddle was created by a really bad breakup in the 70s when the Postal Service and the US Government tried to get divorced. The Postal Service wanted to have a career as a stand-alone profit making entity but its control freak Government spouse wanted to keep it under a heavy regulatory thumb. Worse, the control freak spouse is schizophrenic, alternating between pro union and deficit hawk leanings. The only certainty is that “nothing can be closed in my district,” which can be a challenge if every elected official feels the same way.
Our attention spans don’t do well when two complicated things combine to create one bad result. The spin plan of choice is: “if one of the complicated things is bad for your side, just blame the problem on the other.”
Complicated thing number one is that mail volume is getting crushed by email, texting, unlimited phone plans, a decreasing ability to write complete sentences and online bill paying to name a few, and mail volume is where the revenue comes from.
Complicated thing number two is the control freak ex spouse, which decided to require pre-funding of certain health care costs for retirees back in 2006. Today’s defaulted payment was due a year ago and the one due a month from now is for this year.
Though no other entities are required to make similar payments, the control freak ex spouse has adjourned without resolving the problem.
Here are some of the war cries in the Land of Muddle, at least according to the spinners. You figure out who’s who.
No closings and no stoppage of Saturday deliveries because either or both would reduce the number of employees and thus union membership.
Please, control freak ex spouse, let me close 13,000 useless post offices and stop delivering on Saturdays.
The “mailing community” (spin for junk mailers) is concerned about the continuation of a service they depend on (spin for the cheap postal rates they buy with political contributions).
Go away ex spouse and forget about those big payments that nobody else is required to make. We’ll use the money to keep living a nice lifestyle even if our revenues are on a death spiral, but we’ll be back to you in a few years when we need you for alimony.
No taxpayer bailouts.
Maintain universal service (you still get mail if you are the Unabomber) no matter what the cost.
Don’t do anything I can get blamed for like close a post office in my district.
Irony alert: the Postal Service is depending on a $300 million windfall in the next few months because of…wait for it… political junk mail.