by Simon Black: Should
I Buy Gold at Its All-Time High?
When I was
a kid, it was a big deal when the postman came around. He was an
important man carrying important documents from far away lands that
we could only dream about… and each time he pulled up there
was a brief glimmer of anxiety, wondering what unexpected surprise
he might be delivering that day.
At the time,
I remember postage stamps for first class mail costing about 20
cents. If you’re a bit older than me, you might remember them
being much cheaper than that.
In fact, prior
to President Nixon taking the US dollar off the gold standard in
1971, stamps cost 6 cents. In the 40 years since then, the price
of a first class letter has been raised 20 times, nearly 8-fold
higher than before.
To put things
in perspective, the price of a stamp in 1863 was 3 cents… so
we’re talking about a 100% increase in 108-years, followed
by a 733% increase over the next 40-years. And yet, despite such
rampant price inflation, the US Postal Service is hemorrhage cash
and nearing failure.
In fiscal year
2010, the Postal Service suffered a $8.5 billion net loss, the latest
in a serial trend of widening losses. The only way the Postal Service
keeps surviving is from the generosity of US taxpayers and Chinese
bondholders who foot the bill for its continuance.
Service has nearly 600,000 employees; it’s larger than the
active component of the United States Army, in fact, and, similar
to how the Army is far-flung all over the world in places where
it has no business operating, the Postal Service has offices across
small-town America where there is no chance of profit.
There are over
3,000 post offices across the country that generate less than $27,500
in annual revenue. It’s barely possible to pay rent and keep
the lights on with that kind of revenue, let alone hire a staff,
maintain delivery vehicles, or pay for fuel.
organization with such a costly structure is doomed to fail, and
if it weren’t a government agency, it would have gone bust
a long time ago. By the government’s own admission, the US
Postal Service can’t compete with private courier services,
yet politicians insist on keeping it alive in the only way they
know how– theft and deceit.
Carper recently introduced a bill
called the Postal Operations Sustainability and Transformation (P-O-S-T…
get it? See how clever they are?!?) Act of 2011.
The bill is
filled with oodles of luminous wisdom like, “The United States
Postal Service shall develop a plan for the expansion of retail
alternatives to post offices, such as… the Internet.”
takes an Act of Congress for the Post Office to incorporate the
Internet into its business model… and this is what passes for
a turnaround business plan in Washington.