Kevin Drum observes that the Post Office is more efficient and effective than we give it credit because ... it fully accrues for future pension and medical costs.
Over at Jon Cohn's place, Alexander Hart explains why the post office is better run than you think. Go read it. I don't have any big axe to grind in favor of the USPS "” in fact, I'm pretty annoyed at how complicated it is to calculate postage these days on supposedly "odd" size envelopes "” but the fact is that they're actually pretty efficient and pretty cost effective. I'd welcome private competition for first class mail, but just go ahead breathe the words "universal service" and see how many private sector companies are still eager to compete with the post office for 46 cents an ounce.
Wow, I have been so unfair to the post office. I commented:
Great - the post office is really efficient because ... it fully accrues for benefits plans that are way beyond anything paid in the private sector, and reliably pays these benefits to huge, bloated work forces. I am confused Kevin. I read the article you linked. What the heck did you find in the linked article that had anything to do with "efficient" or "cost effective." Postal rates have grown at something like twice the rate of inflation. Even industries you demagogue against, like oil, have raised prices less than the post office.
I don't know much about Alexander Hart, but my suspicion is that this is somehow a broadside in the public-private battle. If so, then his focus is awfully narrow. The feds may have accrued for their pension and health benefits, but they sure have not socked away any assets besides government IOU's to pay for them. At the end of the day, most private company health and retirement plans are actually backed with real, 3rd party assets. If you want to talk about pension law, private companies are not allowed to invest but a small percent of pension funds in their own stocks and bonds. Not so the Feds -- the Post Office is running the equivalent of the Enron 401K invested 100% in Enron bonds.
And oh by the way, if we turn our attention to the states or local governments, the situation is entirely reversed. In fact, many US public entities have ZERO percent funding of health plans and ZERO accrual of future costs, taking retiree benefits entirely out of current cash flow.