The Post Office Is Not Really In Trouble After All

After months of hearing that the United States Post Office was failing and that only draconian service and staffing cuts would restore it to solvency, it appears that congressionally mandated accounting changes have been responsible for the issues that the Post Office now faces. Specifically, the Post Office is now required to expense and set aside money for health care premiums for workers going out 75 years. This has produced a $20 billion shortfall which, coincidentally, is the amount of the projected deficit. If you were to restore the accounting standards that are used by every other company in America, whereby health insurance costs are paid as they are incurred, you have a solvent Postal Service. Government accounting is bizarro land compared to private accounting. Everything is expensed, nothing amortized and no asset is ever recorded as having any value. A balanced budget would be nice but to look at the balance sheet of USA Inc. through the same lens as an investor looks at a company on Wall Street is a mistake. So our fear of the demise of the Post Office is unwarranted at least for now. The long term trend away from paper is certain, and the Post Office is dealing with the challenges of delivering reduced volume of mail. But the situation is not helped by Congress’s mandating ridiculous accounting changes.