Sunday, May 13, 2012

The End of the U.S. Post Office, Part 3 of 3

In Part 1 of this series, I commented on the post office's bottom of the barrel customer service.  Then in Part 2, I wrote about how the USPS executes poorly on their core business.  Today I'm going to briefly comment on the post office's financial irresponsibility.

About 5 years ago, the USPS started selling "Forever" stamps.  For those who are not familiar with them, the Forever stamp is designed to cover any first class mail, regardless of future postage increases.  You can think of it as a voucher without an expiration date.  About 20 years ago, stamps cost 25 cents apiece.  By the end of 2012, equivalent first-class stamps will probably cost 50 cents.  Therefore, if you were able to buy a Forever stamp back then, your postage savings would amount to 50%.

"Forever" - basically false advertising

This is of course great for a consumer, but there are 2 fundamental problems:

  1. Most consumers are unlikely to purchase a sufficient amount of Forever stamps to actually realize a substantial savings.  Also, postage-heavy businesses could potentially benefit, but any self-respecting business (or individual for that matter) would know better than to "invest" in the Post Office (see Point 2).
  2. The Post Office is effectively issuing bonds/debt which it will never be able to pay back.  Such a liability is in fact the definition of a Ponzi scheme.
The Post Office itself admits its financial woes and bankruptcy is basically inevitable. So how financially and morally irresponsible it is for them to issue these Forever stamps.  This is basically a deceptive attempt by the USPS to make a quick buck now but delaying the responsibility of how they will honor the stamps.


3 comments:

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