Courtesy of Occupy Democrats, where it currently has over 23,000 likes and 28,000 shares.  This meme has a spattering of half-truths, but is mostly false or misleading.  We’ll take each point separately to pick it apart.

1. The USPS is NOT in debt, it’s NOT losing money, and it costs taxpayers exactly $0.

This is a bizarre claim, and since it’s not sourced it can’t be known exactly how this conclusion was reached.  However, under almost any definition or understanding of debt and losing money, this is false.  Looking at the Post Office’s own report this year, we can see that they are in serious financial trouble.  Their total liabilities are $63.3 billion, while their assets are only $23 billion.  It even gets worse than that, because there’s an additional $46 billion in additional future retiree health benefits that the Postal Service cites, but doesn’t include in their balance sheet.  As far as current debt goes, they have reached their $15 billion limit imposed by Congress.  Anything beyond that requires Congressional approval, but since they’re apparently not in debt this shouldn’t be an issue.

Is the Post Office losing money?  Yes, in almost any recent time frame you look.  Occasionally, they might have a quarter in the black, but over the past decade, they’ve lost about $47 billion, and are projected to lose another $6 billion in 2015.

But does it cost taxpayers money?  Not officially, but this is misleading.  The Post Office doesn’t use money from the Federal Budget, as they are supposed to be self-sufficient, relying on their own revenue.  The problem is that they are fiscally insolvent, and will eventually cease to exist, unless the government bails them out.  They’ve already borrowed $15 billion from the US Treasury, which will need to be absorbed by the government and taxpayer if (when) they default on it.  Congress could delay that default by extending their debt limit, but that would only increase future taxpayer liabilities.  Given their dismal fiscal outlook and the downward trajectory of mail revenue, the Post Office will eventually have to admit bankruptcy and/or be bailed out, and that’s when the costs will become apparent to the taxpayer.  Just like with Fannie Mae and Freddie Mac, quasi government entities don’t cost us money, until they fail.  Then they cost us boatloads.

2. Republicans have artificially created the USPS “Bankruptcy” by forcing it to pre-pay 75 years of employee health care retirement benefits…

This is referring to the Postal Accountability and Enhancement Act of 2006.  An exciting read if you get a chance!  The first thing to note about this law was that it was bipartisan, not just “the Republicans”.  Out of the 3 cosponsors, 2 were Democrats, and it passed quite easily with support from both parties.  This law required, among other things, that the USPS start pre-funding its retiree health care benefit payouts in the future.  Prior to this, the USPS had a “pay as you go” system of funding its pensions.  With the advent of the internet and resulting plummet in mail revenue, it was clear that the USPS was setting itself up for a gigantic crisis with regards to its generous pension benefits.  Having a shrinking business model, and increasing pension costs was not sustainable with a “pay as you go” system, so something had to be done.

The law requires a payment of roughly $5.5 billion per year to shore up the unfunded liabilities promised in the future.  While it’s true that this puts a significant hamper on the Post Office’s finances, the old way would surely result in a ticking pension time bomb.  It’s also true that the Post Office has repeatedly failed to meet these pension payments, and little headway has been made in diffusing the bomb.

Saying Fed Ex and UPS are exempt from these requirements is correct, but irrelevant.  They have their own mechanisms of ensuring they meet their pension obligations.  It’s likely that no private company would have come up with the pension model of the USPS, and if they did, it would lead to bankruptcy and restructuring for that company.

Those bemoaning these “harsh” pension initiatives also fail to acknowledge the tremendous benefits that the Post Office gets by being a government protected entity.  Some have estimated these benefits translate into $18 billion a year, far exceeding the $5.5 billion required to secure future pensions.  Here’s a partial list of these benefits which no other company gets.

• Legal Monopoly– There are laws forbidding anyone from competing with the Post Office.  This essentially gives the USPS a guaranteed monopoly on a huge sector of the economy without fear of competition.
• Tax Breaks– The Post Office is exempt from state and local property taxes, as well as vehicle registration and parking tickets.  These exemptions save over $2 billion/yr.
• Cheap Money– They can borrow from the US Treasury at highly subsidized rates.  Currently, they owe only 1.2% on their $15 billion loan, much lower than market rates, especially considering their precarious finances.

3. Curiously, there is no #3 in this meme, it goes from #2 to #4!

4. The first thing UPS and FedEx will do is jack up their prices to maximize their profits

The Post Office “jacks up” their prices all the time.  Stamp prices have gone up about 1500% since the 1950s and 500% since the 70’s.  It’s pure speculation about what other companies would do, as its illegal to compete with the Post Office.  They’ve carved out a few exceptions for express packages like FedEx, but no one else is allowed to even enter the mail business.

It’s interesting to note that the last time someone tried competing with the Post Office was Lysander Spooner, in the 1840s.  He started the American Letter Mail Company, because he believed the Post Office was overcharging, and considered it an unconstitutionally imposed mail monopoly.  Spooner succeeded in offering cheaper postage than the government, and even got them to lower the price of a stamp!  However, this was short lived, as the US government eventually put an end to the competition, and his business.  Any entrepreneur or cub scout that’s tried since has been stopped immediately.

It’s impossible to say what the changes and innovations would be with a free market in mail, but some entrepreneur would likely come up with something much better than the Post Office, and create the next Uber, or Amazon, for mail.  The Post Office is quite slow to innovate and improve efficiency, partly because no one will reap the benefits, and partly due to the restrictions Congress puts on it.  If mail did become more expensive (because no company wanted to operate at a $6 billion a year loss), it would incentivize changes in behavior.  Most mail is either ads or bills anyway, so companies would have an incentive to move toward online or other methods of notification.  Perhaps it’s not efficient to have a whole network of vehicles perpetually roaming the country to ensure everyone gets their latest JC Penny coupons.  For the one or two hand written letters one sends to their grandma each year, most wouldn’t mind paying a little more if need be.