Radio personality Clark Howard spreads misinformation on USPS finances

In a blog post mostly devoid of actual facts, radio personality Clark Howard suggests that the USPS needs to be privatized. Howard claims that the USPS lost “almost $9 billion” last year. The actual figure was $8.5 billion, but Howard seems oblivious to the facts behind that number. As most readers will know, $5,5 billion of the “loss” was due to the annual “trust fund” payment mandated by Congress since 2006. A further $2.5 billion resulted from the required revaluing of the USPS’s future workers comp liability- a non-cash accounting entry caused, not by anything the USPS did or didn’t do, but by changes in long term interest rates. The USPS’s actual operating loss was about $500 million.

Like the Washington Post and numerous other news outlets, Howard isn’t interested in the facts, especially if they don’t fit his preconceived solution- what else- privatization!

The USPS has really taken it on the chin in so many ways in the past. Last year, the postal service lost almost $9 billion. The business model is simply not sustainable any more.

So I expect you’ll be seeing a big fight with politicians grandstanding and saying that you can’t close this post office location or that one. But I think the whole entity should be sold off to a private vendor, period.

Now, don’t get me wrong. What we pay for postage is actually very reasonable. But I still think the answer is to sell the postal service off and get rid of it being an obligation of the federal government. Let the free market figure out how to best deliver mail.

Howard and the others cling to the belief that private companies are just dying to get into the mail delivery business. It doesn’t make sense, of course- why would investors be interested in a business that you claim is not sustainable?

via Postal service’s budget deficit could be remedied by privatization | www.clarkhoward.com.

  • Robert

    How convenient of you to disregard a loss of over 5 billion dollars as just a payment to congress. When the rate commission approved raising the cost of a stamp it took this payment and other things into consideration. When Postmaster Potter was poor mouthing Congress to overhaul the Postal Service prior to the restructuring he agreed to making this payment until 2017. The problem isn’t the payment, the problem is that management in the USPS has failed to do it’s job and control the spending. This is in part to the fact that most of them would never be in a management position in the private sector. They neither have the skill or the education to successfully manage in the real world. The plan and simple fact is that no matter how much you give them to spend they will find a way to spend even more than that. To prove my point I’ll make a prediction now that the Postal Service will once again go billions of dollars in the hole again this year.

  • brian

    Sorry Robert, but your comment doesn’t make any sense. I didn’t “disregard” anything- I pointed out the facts that Howard disregarded. Are you saying that absent the $5,5 billion charge, and the $2.5 billion accounting charge, the USPS would still have a loss of $8.5 billion? If so, you’re wrong. That’s simple math- it’s not open to question. You’re welcome to your opinions, as is Howard. I’ll stick with facts.

  • guzz77

    robert way off I don’t know if you realize it but stamps are still 44 cents they didn’t go up priority mail did anyway your comments don’t make sense the pre-payments sunk us there has to be somthing done about it we are the only gov agency that has to pre -pay

  • labman

    Mr. Clark you would make a perfect aid to Sen. McCain,
    both understand little about the USPS

  • joe says

    I actually listened to almost ten minutes of this guy….what he said was basically half thruthes and outright lies. But remember, when newspapers and radio shows are attacking it is for one reason….they are after our advertising dollars. These folks are hurting and Standard Businees Mail hurts their industries….don’t be fooled by the motive.

  • common sense

    Note to Clark: more people use the post office every day than listen to ALL the AM radio stations your little show is on!

  • Deb

    I think that most people think the way Clark does…..the USPS is set up so complicated and strangled by government rules that it is impossible to make a profit. Clark and others view the USPS as a government entity that is failing in the “billions”, and perception is all that matters.

  • Rob

    Evidently, Congress and the President intend to not relieve the USPS of its annual retiree payment so that the deficit will not grow….you may think it would not make a difference in the deficit but any relief would be seen as increasing the deficit by those who do not understand how we got here.

  • Thinker

    OK! Listen every fool out there!! The pony express was a private entity and a free market but the damn company could not handle it then and they damn sure ain’t gonna handle it now. History plays a big part nowadays. Look at the prices those two private companies charge and don’t forget they do not go everywhere (they pass at least a third of their packages to the USPS, cause it’s not feasible or cost wise to deliver everywhere, but the USPS does). They (Fedup and UP yours did make a profit cause of the USPS and remember USPS profit is from letters and they have dwindle to 2/3) USPS delievers letters. packages and junk mail. You think Fedup and UPS will ou got to be idiots.

  • Barebones

    I guess we should all ponder what the under-informed may be proposing. Until we achieve a “universal” system of electronic communications for business, private, legal, and advertising we will have to depend on the system set up in nothing less than the Constitution of the United States. Of course then those portions of delivery of commodities and goods that are not profitable for companies (ie: Fed Ex or UPS) if you don’t live in LA, CHI, NY, ATL…et al then you are out of luck. Easy to attack USPS, hard to come up with private/profitable alternative that serves the country one tenth as efficiently…..

  • ART D

    THIS GUY CLARK HOWARD IS ALWAYS MISREPRESENTING THE POSTAL FACTS. HE NEEDS TO GET HIS FACTS STRAIGHT OR GET A NEW JOB

  • RANDALL

    I’d like the oppurtunity to discuss the companies of one of these non-postal employee kibitzers. They claim we just spend and spend. Let me give you the REAL TRUTH. Mgtment puts in for 6 writing pens. When the order comes it is for 3. We try to hold onto them at the counter and you good citizens steal them as fast as we put them out. So we are forced to provide our own for the customers and guard them with our lives. When we run out of toilet paper and other supplies, guess who goes to the store and buys more with their own money. Not you Joe Public. I’d love to come to your place of business and review your operation. (open your doors to the public and let us see your operation) Congress has blackmailed the Postal Service as its personal political cash cow for years. We are losing jobs by the thousands. You want to shut it down, go ahead, lets see what you do in the economy with another million plus employees collecting(including who knows how many that do business with us) unemployment. Lets see congress explain why their holding 50+ billion dollars for CSRS retiree employees who are dying like everyone else. And that does not answer the question as to, how much is really in those retirement funds. Those that think they know so much about the Postal Operations, should come on down, Deliver a city route, sort the mail hour after hour, deliver a rural route, wait on pen stealing angry customers at the counter, supervise with a computer on your back all day for one report after another. Oh and don’t forget to KEEP SMILING. For every Postal Employee, from the PMG down to the Mailhandler, I applaud you. For those that think they/we stink, BE CAREFUL WHAT YOU ASK FOR, YOU MAY GET IT.

  • david

    Howard misinterpreted the facts however he is correct in calling for privatization. It should be done gradually by first allowing any licensed delivery firm to deliver into the mailbox. This would gradually reduce delivery costs. After evaluating how this works there are many other activities which could be privatized without throwing the entire organization under the bus.