USPS's Financial Crisis, Explained

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USPS's Financial Crisis, Explained | WSJ

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More than a decade of losses have put the U.S. Postal Service in a dire financial situation. To understand how this happened, WSJ takes a look back at how the modern postal service became an entity balancing public service and the need for profit. Photo Illustration: Jacob Reynolds/WSJ
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@LoserGopher 4 жыл бұрын

It didn’t “lose” money for 13 years it’s a public service the department of defense military didn’t lose money

@tbrickman 2 жыл бұрын

It is supposed to be profitable as of 2006

@maarten1115 Жыл бұрын

@TBrickman It had been profitable since the 80's. It became unprofitable in 2006 due to PAEA.

@saahiliyer11 4 жыл бұрын

No company has ever had to pre-fund retirement benefits decades in advance.

@HikaruKatayamma 4 жыл бұрын

pre-fund for 70 YEARS in advance... Also, the USPS was created IN THE ORIGINAL ARTICLES of the Constitution. It was never designed to be a "for-profit corporation." That's a Republican myth intended to destroy it. Just like we don't demand that the DOD, TSA, or NTSB turn a profit. These are government SERVICES, not businesses.

@organizedchaos4559 4 жыл бұрын

I know that’s just stupid. It’s like a death trap

@taronyezdoghlyan6436 4 жыл бұрын

Weird how this want mentioned in the video even though ppl watching this have probably seen the john olivar ep about this

@macbethy 4 жыл бұрын

Yes they do, it’s called a defined benefit pension asset. Almost all large companies which is older than 30 years has such a scheme - you can see it in their annual accounts.

@LincolnRon 3 жыл бұрын

@@macbethy Apples and oranges. A defined benefit pension asset is not prepaid 70 years in advance. It is actually the exact opposite. A defined benefit pension asset is based on how many years you have been paying into it. It is not paying for people who haven't even been born yet like USPS is required to.

@DistractedDaisy 4 жыл бұрын

Does the military make money, education, highway spending. The USPS is a service not a business!

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@vikcreation5110 4 жыл бұрын

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@The_Revolutionist 4 жыл бұрын

Make it a State Departement again, now!

@LeonardoDeVinci1452 4 жыл бұрын

So the USPS needs about $79.9 billion to operate and that is unacceptable. But the US DOD gets $617 billion and they make tanks that don't work and jets that don't fly. Yet till Dejoy took over I got my mail and packages reliability 6 days a week. All republican presidents since Regan have been trying to break then privatize USPS. Can you imagine how much it would cost to mail a letter if this happens?

@kthog3348 4 жыл бұрын

@organizedchaos4559 4 жыл бұрын

If American want the postal office to survive it doesn’t mean that they need to cut hours. Something that is suppose to be a universal benefit should be subsidized by the government just like how we subsidize farmers

@saahiliyer11 4 жыл бұрын

Utopia Light Not even that. All the USPS needs is congress to not force them to pre pay benefits 70 years in advance and let them raise prices as they need to. That’s all. The USPS is being denied basic abilities that all businesses have.

@organizedchaos4559 4 жыл бұрын

Saahil Iyer but it’s depends. Raising the price can make sending mail unaffordable to the poorest.

@saahiliyer11 4 жыл бұрын

Utopia Light No one said they have to raise prices across the board. Think about another company with that kind of reach. The USPS, having so many locations in so many varying communities can raise or lower prices to match the local income level. So a poorer area will see lower postage prices that are effectively subsidized by higher postage prices in wealthier areas.

@mechnaprime3637 4 жыл бұрын

Subtitles are MAJORLY de-synced

@ramonching7772 4 жыл бұрын

I have an feeling that the USPS is being taken advantaged of by the private couriers like the UPS and Fedex. They take the easy and profitable part of the business and leave the losing part to the USPS. This makes USPS difficult to fund the losing part. Ex: If it takes 2 profitable packages delivered to the city to make up for one losing destination, then when the private couriers take 1 profitable part, the USPS will end up losing. It's like skimming off the cream and all USPS is left with is just the water.

@karentilton12 4 ай бұрын

Who do you think moves the mail? UPS and FEDEX

@ThatBronxgirl7 4 жыл бұрын

This is just pure stupidity. First, RAISE the price of mail delivery. Add zone payments if you must but raise prices. Second, Monday thru Friday delivery only. Our lives won't come to an end. Finally, scale way back on labor costs. The unions get way to greedy. I'm sadly amused why we demand companies offer everything under the sun.

@mdsoulsounds 4 жыл бұрын

WSJ obviously advocates privatization of many govt services. Would be nice to equate the raw efficiencies of the Pentagon, for example, to that of the postal service. The postal service should never be comprised as we wouldn’t compromise the military. They’re govt entities like public infrastructures ( parks, roads) which benefit the whole national security and economy. The economies of scale benefit a flat postage rate in urban centers. And if the postal service were not obligated to park over 5 billion $ in a retirement fund, no one would be having this conversation now!

@ricardofranca6818 4 жыл бұрын

Shame on WSJ for showing misleading graphs. 2007 was a pivotal point in USPS funding regulations and you show 2 graphs that start exactly at that date (at 00:05 and 06:30), ignoring the data from previous years.

@falconJB 4 жыл бұрын

Isn't it so shocking that the post office has lost money every year since GWBush passed the Kill the Post Office Act?

@fishingoutofwater 4 жыл бұрын

You’re throwing away the lifeboat cause the titanic is so great. Leaving us in the hands of a duopoly is a recipe for disaster

@kthog3348 4 жыл бұрын

@leonluo 4 жыл бұрын

Oh... Probably only Amazon can help USPS on the money side but nah, let's do everything in house.

@auro1986 4 жыл бұрын

a national internet blackout could save usps

@saahiliyer11 4 жыл бұрын

Aurobindo Ghosh So would Congress not needlessly sandbagging them all the time.

@spagetisauce4208 4 жыл бұрын

Remember when they ruinedpewdiepies disnney deal by giving false information?

@zhaohong1972 4 жыл бұрын

@SAURAJ12 4 жыл бұрын

Go paperless for your mail. I personally use Usps or FedEx,if I have to mail stuff,it's worth the hassle.

@zhaohong1972 4 жыл бұрын

@crashweaverda 4 жыл бұрын

If you want to save usps make congress back pay the postoffice for all the losing operations like there suppose to iaw the postal reform act. Also get someone to run it other then yes men. Runyon was the last outsider to run the USPS and he saved the USPS back then and the Unions hated them.

@postaldrummer2609 Жыл бұрын

stop paying employees that don't do anything

@yeathatsright1034 4 жыл бұрын

Federal reserve isn't government agency

@ahamed4152 4 жыл бұрын

Price the delivery based on cost

@saahiliyer11 4 жыл бұрын

Ahamed While that sounds like a good idea, it really isn’t. If you price mail on cost, then the most expensive mail is going to be those that go into and out of really rural areas. And people there aren’t exactly rolling in dough. If they were, Fedex and UPS wouldn’t be handing off every package heading for those places to the USPS. The fundamental part of the business model of the USPS is that people living in really populated areas see prices that are a little bit higher so people in rural areas can see prices that are a lot lower. That’s the only way this system works without overly punishing people for living out in the country.

@ahamed4152 4 жыл бұрын

@@saahiliyer11 thats the cost of living in remote areas.

@ramonching7772 4 жыл бұрын

@@saahiliyer11 Are you sure about UPS handling the the difficult packages to USPS. I had a hunch only.

@saahiliyer11 4 жыл бұрын

Ramon Ching Well it’s not exactly like that. What Fedex and UPS usually do is hand off packages to the USPS for final delivery once it’s reached its general destination. It’s part of a system called “smart post”. But the idea is why spend money on this expensive to get to place when someone else is already going there. Note that I said “expensive to get to”. Rural Nebraska isn’t exactly hard to get to with everything being flat and all. But it is extremely expensive to get to, and you can’t really justify denying postal access to a family who lives on their farm, far from the nearest town.

@ramonching7772 4 жыл бұрын

@@saahiliyer11 That's my point, the expensive delivery point is what is making USPS lose money. USPS is charging a competitive price for those "easy" areas. And their profit is eaten up by those difficult areas, with possibly a loss. The other guys don't have this mandate "burden" to carry". I don't know the actual figures, but say an outpost might cost 50K a year to maintain with small volume. That's a lot of catching up to do in the easy areas. The way to solve the problem is cost plus pricing. But it will become very expensive for some areas. The corporate is gaming the socialized system.

@czerbniak75 Жыл бұрын

Dzisiaj i jutro jestem na poczcie.

@HusseinDoha 4 жыл бұрын

USPS is doing financially well. But Congress dictated on them to pre-fund the retirement of their employees 70 years in advance (pre-fund generations of unborn Postal workers). No company ever does that. They literally luck all their surpluses into this fund. Rather than expand the services.

@williamceliu3065 4 жыл бұрын

If you have any financial knowledge than you know it is always cheaper to start saving for retirement as early as possible.

@TheTrueAdept 3 жыл бұрын

@@williamceliu3065 yeah but not for something that is for the NEXT Generation.

@Chickenhunter9 4 жыл бұрын

I don’t understand why this is even a crisis. Jerome Powell can just print more money and the problem is solved. Complete non-issue.

@isaganipagarajr3298 4 жыл бұрын

If you make more money the money will lose the value because of supply

@Chickenhunter9 4 жыл бұрын

Isagani Pagara Jr No duhh However, Trump and JPOW seem to have no problem with this. Just look at the stock and bond market. Money printer goes brrr and stocks go up Also considering USPS only deals in USD, NBD. Just print more money. That’s how we reinflated the stock market bubble to the point of us saying “what bubble?” Bloomberg understands this. Idk why the WSJ doesn’t.

@Chickenhunter9 4 жыл бұрын

America First Money printer goes brrrrrr fred.stlouisfed.org/series/WALCL

@ramonching7772 4 жыл бұрын

Yes Jerome Powell is printing more money, but he is not giving it to USPS. He is giving it to bankers and friends only.

@karentilton12 4 ай бұрын

Typical government...running at a loss

@watchthislekkertje 4 жыл бұрын

This smells fishy! WHY WSJ?!

@amhr58 4 жыл бұрын

This video is more useful than the current bureaucratic response to the years-long, bleak outlook for the USPS. Too often, America's congress provides a bi-partisan failure to adequately create solutions to issues like this in a timely fashion. The American people need better leadership and service from Congress.

@ahamed4152 4 жыл бұрын

Raise the price simple

@saahiliyer11 4 жыл бұрын

Ahamed They can’t though. That’s one of the ways Congress sandbagged them.