Not much from the way our country operated in 1775 still exists.  The United States Postal Service (USPS) is one of the few.  Yes, it is now over 234 years old and I wonder if it has outlived its usefulness.  We only had horses back then – now we have the Internet and FedEx.  If we do still need the mail, isn’t it time to privatize it? 

Sure, the government made a half-hearted attempt in the 1971 to remove the post office from it’s budget, but it is still an agency that is wholly owned by the Federal Government. 

In 2008, the USPS lost over $2.8 BILLION dollars in operations.  Huh?  They are projected to go $7 BILLION in the red this year.  Yikes!  Something is truly wrong here.  I work with businesses every day to help them grow and I can tell you this one has been out of business for years and does not even know it yet.  Can we really still afford to have a 48 cent stamp that delivers a piece of mail thousands of miles?

Currently, the Postal Service is financing its losses with the Federal Financing Bank, another government corporation that is under the supervision of the Secretary of the Treasury.  Currently, they are not legally allowed to borrow more than $15 billion total, and are not allowed to increase their debt by more than $3 billion in any given year.  As of June 30, 2009, they had borrowed $6.4 billion from the Federal Financing Bank, and they expect to be out of cash by the end of September.  Do you think the Obama administration is going to make them shut down when they run out of cash?  Or do you think that they will get a bailout?  I think the later is more likely. 

The media always like to say that our “government” lost this money, but this really comes right out of your pocket and mine – we are “the government”.  It is funded by our tax dollars every day.  We should tell Washington that we won’t continue to stand for their recklessness with our money.  Bernard Madoff went to jail for much less!

What should we do to fix the problem?  When I work with businesses to get them in line with their goals, the first step is to determine what they do best and then decide if they can do it in a profitable manner or if it is time to pull the plug.  In the case of the USPS, they need to re-evaluate what they do and their pricing methods.  Cut costs or raise the price!  Those are the only two choices to get out of the red (besides pulling the plug).

Here are my suggestions for them:

1. Does the USPS really do a better job at delivering packages and specialty service items like priority mail than their competitors?  I don’t believe so.  FedEx and UPS do a much better quality job of moving their packages, tracking where they go, and their prices are comparable or more reasonable.  The USPS should get out the business of delivering packages or specialty service items.  Get back to basics – Letters only!

2. Do they need to deliver mail six days a week?  The short answer is no.  The USPS does not deliver mail on a specific schedule so one day before or after does not really matter.  The postal carrier route drivers should be cut in half and alternate routes every other day.  This would reduce the cost of labor for delivery and the vehicle emissions of the carriers by 50% immediately.

3. Do we really need to have an exclusive market for selling stamps and post office boxes?  No, other places sell stamps.  Provide a sales outlet program just like other businesses.  Sell the stamps to outside businesses as distributors at a slight discount and let them charge the retail price and make a small profit.  The UPS store and other mail packaging outlets already sell the stamps with a mark up and provide post office boxes.  Just expand this distribution chain.

4. Post Offices should be warehouse only space with no counter service available.  We don’t need to build expensive new post offices with counter space and post office boxes any longer.  Their physical locations should be used for sorting and a central area for carriers only.  They don’t need to be in high rent downtown locations for cities and towns.

5. Bulk mail rates should be higher than individually stamped envelopes.  This could help our country move towards a more environmentally friendly mail system and eliminate a lot of junk mail.  The future of online marketing and new sources will eliminate the need for “old fashioned” printed mailings soon.

6. Lastly, we already license private contractors to be mail carriers and haul our mail.  Why don’t we just outsource the whole process and open the mail delivery process to some competition?  We keep hearing about how health care needs more competition.  What’s good for the goose must be good for the gander!

Common sense rules on this topic, but once again, our government will drag their feet re-vamping this whole process because it would mean giving control back to the people.  There are a lot of wasteful areas in our government, but this is one that seems pretty easy to tackle.  As always, call, email, write and visit your Congress and Senate Representatives.  Tell them you are tired of wasteful spending!  We can’t seem to say it enough these days.

I just read an interesting article from the Detroit Free Press entitled “9-cent IRS delimma leaves lawyer confused.”

Apparently, Attorney James Howarth got a letter from the IRS stating that he owed five cents. Then later got a notice that he was due a refund of four cents.

Howarth was updated because of the cost of the check, his CPA’s fee, envelope, secretary’s time, postage and other related cost.

I see his point, but my question is about the other end of this deal. How much does the IRS waste to send these out,attempt to collect, and to process payment once the payments are received. There should be a minimum amount of tax due before a notice is sent out – and I can tell you that the minimum is not 5 cents. Also, if he worked with his CPA on a fixed fee arrangement, then he wouldn’t have to worry about calling him for help with the matter – or would he have to waste his time doing it.

The story gets better. A few days after getting the notice that he owed 5 cents, Howarth got a notice saying that he was due a refund of 4 cents, but he would have to make a formal request to receive it. He found it quite odd that the payment of the 5 cents he owed was not optional, yet the 4 cents they owed him was.

His dilemma now is whether or not he can net the two together, and pay only 1 cent or not. Of course, he called them, but said he gave up after “an inordinate amount of time on hold.” Once again, he should have made sure he had notice protection or some sort of fixed fee agreement through his accountant so that this would be handled for him.

All in all, I think he spent more time complaining about it than he did working on it.

In The Know: Should The Government Stop Dumping Money Into A Giant Hole?