Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

Amazing, isn’t it, how many areas of our lives are touched by the ignorance of Monetary Sovereignty.

Washington Post
Senators unveil bipartisan Postal Service rescue plan
Andrew Harrer/BLOOMBERG

A bipartisan Senate bill introduced Wednesday would give the U.S. Postal Service about $7 billion to pay for employee buyouts and other debt, allow a renegotiation of postal worker health-care benefits and require two years of studies before ending Saturday mail deliveries.

The plan, a modified version of proposals previously introduced by Sens. Thomas R. Carper (D-Del.) and Susan Collins -(R-Maine), will be considered by a Senate committee Wednesday.

The bill refunds about $7 billion that auditors agree the Postal Service has overpaid into federal worker retirement accounts. The money would be used in part to offer buyouts of up to $25,000 to as many as 100,000 eligible postal workers, with the rest of the funds put toward other debt.

Refunding the money “is not a bailout,” Sen. Joseph I. Lieberman (I-Conn.) said. “It’s the result of a legal analysis that everybody agrees with, that this was in fact an overpayment by the Postal Service” into the Federal Employee Retirement System.

House Republicans disagree. They consider any attempt to refund the Postal Service with money from federal retirement or health-care accounts would be a taxpayer-funded bailout.

The Senate bill also would scrap a 10-year payment schedule that requires the Postal Service to pay about $5.5 billion annually to prefund future worker retirements. The bill would spread out those payments over 40 years, significantly reducing the annual obligations that postal officials say cause much of the agency’s cash shortfalls. The Postal Service also would be allowed to renegotiate a new health-care plan with its major worker unions to help cut costs.

Short-term spending legislation passed last month by Congress gave USPS until Nov. 18 to make its annual prefunding payments. Aides said Wednesday that they did not know whether the Postal Service would get another extension or be forced to make the payment this month.

If the bill passes, plans to end Saturday mail deliveries would have to wait at least two more years until USPS and postal regulators further study the potential effects on customers and industries that rely on six-day mail deliveries.

The Postal Service also would have to scrap the delivery of mail to some doorside mailboxes in favor of sidewalk, curbside or centralized neighborhood boxes. The bill also would force the USPS to further study the effects of closing post offices and mail processing facilities — a move that postal officials said could save billions of dollars in operating costs.

“Without taking controversial steps like these, the Postal Service simply isn’t going to make it,” Lieberman said. “That would be terrible.”

Terrible, indeed. The post office provides one of our government’s most important services. How in the name of idiocy, was it decided that this particular federal agency must run a balanced budget? Why?

Shall we now demand that the U.S. Supreme Court run a balanced budget? Shall Congress and the White House run balanced budgets? Must the military, the FAA, the CIA, the FBI, FEMA and the other 1300 federal agencies each run balanced budgets?

The federal government very simply, should make the post office a free service, paid for by federal deficit spending. Here’s a little secret for you. Those dollars you spend on postage stamps do absolutely nothing to help the federal government spend. They do not pay for post office expenses. And as we have seen, the federal government can give the postal service dollars at will.

The only thing accomplished by postage costs is to reduce the use of the postal service. Is this a worthwhile goal? Is reducing the number of postal workers (thereby increasing national unemployment) a worthwhile goal? Is cutting Saturday deliveries a benefit to America?

Postage is a tax on mail users. All taxes are anti-stimulative in that they remove dollars from the economy. As always, those who do not understand Monetary Sovereignty do not understand economics.

I award 1 dunce cap to whomever first decided the post office must run a balanced budget, and to the politicians who continue this harmful charade. This will be my 1066th dunce cap awarded. Not running short, yet. Still sustainable. Still “prudent.” Still living within my means. And the value of each dunce cap has not gone down.

Rodger Malcolm Mitchell

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings