Gingrich jumps on “Forever Stamp Folly” bandwagon

Yet another fringe theory about the sinister motives behind “Forever” stamps, this time from Newt Gingrich. Newt thinks “Forever” stamps are a new concept that will inevitably lead to bankruptcy and, of course, A TAXPAYER BAILOUT!! Apparently no one explained to Newt that Forever stamps have been around for several years now, and so far the USPS has been doing just fine, thank you, at least as far as its own operations are concerned. Without the $5.6 billion a year being siphoned off by Congress, it would have been running a profit. But that doesn’t fit Newt’s world view, so he makes up his own facts. “Union work rules” are of course to blame, although I’ve yet to see the “rule” that requires the USPS “to pay a large group of employees more than a million dollars a week to do nothing”. Neither has Newt, of course…

Post Office Bait and Switch

A new initiative by the U.S Postal Service that appears on the surface to be a good deal for customers is in fact setting the stage for bankruptcy and a future bailout of the Post Office with taxpayer money.

This week, U.S. Postmaster General Patrick Donahue plans to announce that all future stamps sales will be so-called “forever stamps,” which can still be used even if postage rates go up.

Anyone who has had to hunt around for 1 or 2 cent stamps to add to their old stamps after an increase may consider this good news.

However, consider the implications of this action. The Post Office is currently experiencing a severe budget deficit and has been unable to gain approval for a postal rate increase. In addition, they are threatening to stop delivering mail on Saturdays as a way to cut costs. As Peter Schiff astutely points out in this interview with The Daily Bell, the Post Office is trying to solve their short term revenue problems at the cost of even bigger problems down the road.

The Post Office will try to use any short term increase in sales from these forever stamps to solve their immediate fiscal problems. But if the Post Office is already having trouble operating at full capacity with current prices, imagine how difficult it will be to do so in five or ten years after inflation has pushed their costs up AND they are selling even fewer stamps because so many people already purchased them in the past.

In fact, this move is setting the stage for a future taxpayer bailout of the Post Office because it virtually guarantees its future bankruptcy.

The low price of stamps is not the reason why the Post Office is facing such huge deficits. The Post Office is seeking a 5.6% increase in the price of stamps despite an inflation rate of just 0.6%.

Instead, the Post Office is facing budget shortfalls because it is unwilling to engage in the necessary reform of its operations necessary in the modern economy.

As I discussed in To Save America, which is now out in an updated paperback version, the Post Office’s union work rules require it to pay a large group of employees more than a million dollars a week to do nothing. Instead of being able to lay off redundant workers, the Post Office (and by extension, every American who uses the mail) keeps them on salary through a program called “standby time.”

If the Post Office really wants to solve its fiscal challenges, it needs to engage in the difficult work of reforming its operating procedures, including its suffocating and costly union work rules like “standby time.”

Congress should block the Post Office from implementing this genuinely dumb move and force it to confront the true cause of its budget woes and implement real reform.

via Forever Stamp Folly – HUMAN EVENTS.

  • postal guy

    It’s alway blamed on the UNION work rules!!!!!
    To bad no says ” hey Why all the supervisor per personnel
    OR the BIGGEST Money loss is to big mailers (15billion)
    who’s mail has to be ran though the POST OFFICE’s machines anyway.
    Might that be REAL NEWS!!!!!

  • Just sayin

    Typical response Postal guy, someone someone mentions union and the first thing you do is blame managment.
    Why dont you blame the ones really responsible for the financial problems of the P.O. ( Congress)

  • trayslayer

    Newt is acting like a salamander!

  • Jack

    our next president is an idiot.

  • Idiotland

    Desperately trying to pander to stupid morons and be relevant. Sad.

  • DJG

    Gingrich has always been out of touch with facts and reality. What scares me is the lack of viable candidates for the Republican party – Palin is a complete joke. Although it would be hard to do a worse job than Bush, I think she would make Bush look like a genious. The USPS is a cash cow for Congress, they can take money from the Post Office, build some bombs and bridges and then force the Post Office to raise rates. Kind of a hidden tax on Americans and the Postal Servcie takes the heat.

  • John B

    This is another preposterous made up attack by the right on public employees unions. They are masters at extrapolating a position from data completely unrelated to their argument. For instance, stand by time is generally waiting for processed mail to be distributed. This is happens on an occassional basis. Gingrich’s implication is USPS has union jobs which it pays this money to, whereas it is actually a slight cost of doing business on the scale of which we operate. For example, using just 200,000 letter carriers and not considering any other union jobs, $1 million per week translates to approximately 83cents per carrier per day ( 1million/6 days per week/200,000 letter carriers. Of course, I am not advocating wasting money, just pointing out how the right in their unending attack on unions will take data that sounds scary and pound the table with it without putting it in context. The right have managed to weaken unions in the private sector and have now turned their focus on public employees.

  • Vinnie

    Is this the same animal that left his wife while she was dying from cancer? He talking about something that he knows nothing about. Hard to believe he qualifies as a human.

  • Rob

    Go Newt, to bad some of your facts are not correct.

  • PALIN 2012

    I will be a great President!

  • maillady

    Newt- Did it occur to you that this would allow the USPS to continue selling the stamp stock instead of destroying it and printing new stock when the price of stamps increases; thereby saving USPS money?