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Wednesday, December 07, 2011

Republicans' dumb PO rule exemplifies anti-stimulus

by folkbum

The news that the Post Office is set to dump another quarter-million people into the unemployment market next year should thrill exactly no one. Here in Wisconsin, with a craptacular couple of job-creation years behind us (and another in the making), and with 8500 local, state, and federal jobs lost in the last year already, we should not relish the idea that five mail processing centers here will close and cost hundreds more jobs.

Plus, you know, the mail will get slower. That will help attract new business [/snark].

But remember why the Post Office is in this mess: Republicans.

I don't say this purely out of spite. The number one reason why the Post Office is in financial trouble is that in 2006, the Republican Congress (with President Bush's approval) required the PO to do something no single other private, public, or private-public organization anywhere has to do--prepay its health care costs for the next 75 years before 2016.

Right now, today, a chunk of every stamp you buy or fruitcake you ship goes to pay the future health insurance cost of someone the Post Office hasn't even hired yet. This is dumb.

No doubt you can go back to the record--and I mean literally, you can, I'm busy--and find weak-sauce justifications for this requirement, something about being prepared for the inevitable or some such. And let's be fair; in 2006, a lot of people were in denial or oblivion about the bubble part of the economy, and figured that the kind of operating profits the PO was seeing in the mid-00s would continue forever. (Yes, the PO made a profit, without a taxpayer dime.)

But the requirement is still dumb. For one, paying today toward the health insurance cost of someone working at the PO in, say, 2060 seems ridiculous on its face. Who the fizzle knows how many people the PO will have working for them, what the health care market will look like, or even whether SkyNet will be running things completely by then?

Moreover, the nearly $60 billion this will cost--75 years' worth of health care costs ain't cheap--is anti-stimulus. It does nothing for the economy. You ship your dad a Christmas sweater and part of the fee you pay for the privilege goes and sits in a bank account somewhere. Sits there. Does nothing. For 75 years.

With this money, the PO doesn't hire new workers, workers who would buy cars and food and houses and engagement rings. With this money, the PO doesn't buy new equipment, which could have been made by US factory workers who instead sit idle. With this money, the PO doesn't buy local advertising, doesn't build new facilities, doesn't innovate. This money just simply gets hoovered out of the economy to sit idle.

Now I know, grand-scheme, $5.5 billion a year in the face of $15 trillion GDP is not enough to turn around a thoroughly rotten economy. But in an era when a company's decision to hire even a dozen new workers gets headlines and a governor's visit, the effects of this dumb PO rule ought to be seen as significant.

Plus, this is entirely undo-able. The Congress can act right now to remove the pre-payment requirement going forward and even allow the PO to tap the money it's set aside to offset the loss of mail revenue following the bubble's bursting. (Caveat: Suggesting that this Congress can act now to do anything is, sadly, hopeless--Republicans will kill anything they think Democrats favor, including stuff the Republican public overwhelmingly likes.)

So, no, the PO is not in some intractable financial position of its own doing or entirely due to the business cycle. It is being killed by a Republican rule of dubious benefit and severe detriment, and in 2012, the economy and the mail will suffer needlessly for it.

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