Reading the July 2009 Government Accountability Office report
sparks about as much excitement as reading last month's headlines, yet I can crack a smile at its earnest concern.
GAO is adding the US Postal Service's (USPS) financial condition to the list of high-risk areas needing attention by Congress and the executive branch to achieve broad-based transformation.
I'm sure our bureaucratic wizards are in the lab cooking up the next round of public finance models, with complications rivaling those of String Theory. However, I'm also sure that there will be nothing new in terms of results, aside from increased stamp prices – and perhaps a spike in short-term disability by way of calculator calluses.
Within the GAO report, one will find the crowning achievement of government detective work. The United States Postal Service's incompetence has finally shrieked loud enough for our masters to take notice. Here are some of the report's most keenly embarrassing lines.
This year, USPS expects to increase its year-end debt to $10.2 billion, and incur a cash shortfall of about $1 billion.
Another key risk factor is the accelerated decline in mail volume. Mail volume declined by 9.5 billion pieces in fiscal year 2008 to about 203 billion pieces. As of the end of May 2009, mail volume had decreased another 18.5 billion pieces, and USPS expects to end fiscal year 2009 with mail volume of 175 billion pieces – about 28 billion pieces fewer than in fiscal year 2008.
Table 1: USPS's Financial Results and Projections, Fiscal Years 2006–2010
|
| YEAR |
NET LOSS * |
YEAR-END DEBT |
| 2006 |
$0.9 |
$2.1 |
| 2007 |
$(5.1) |
$4.2 |
| 2008 |
$(2.8) |
$7.2 |
| 2009 |
$(7.0) |
$10.2 |
| 2010 |
$(7.0) |
$13.2 |
* All dollars are in billions.
Even handicapped economists of the likes of Paul Krugman will attest that when falling demand is coupled with increased costs, we have a problem. Does the decrease in mail volume indicate that the public has finally come to terms with reality? The GAO doesn't think so. They believe it is simply a matter of economics:
To achieve financial viability, USPS must align its costs with revenues, generate sufficient earnings to finance capital investment, and manage its debt.
Well, duh!
My fellow free marketers, there's no need to worry. With a motto like "Accountability, Integrity, and Reliability," the Government Accountability Office will certainly correct such inefficiency. Just look at their success in reforming programs in the last two decades.
Table 2: Areas on GAO's Current, 2009 High-Risk List
|
| PROGRAM AREA |
YEAR FIRST
DESIGNATED AS
HIGH RISK |
| Medicare Program |
1990 |
| DOD Supply Chain
Management |
1990 |
| DOD Weapon Systems
Acquisition |
1990 |
| DOE Contract Management
for the National Nuclear Security Administration and Office of Environmental
Management |
1990 |
| NASA Acquisition
Management |
1990 |
| Enforcement of Tax Laws |
1990 |
| DOD Contract Management |
1992 |
| DOD Financial
Management |
1995 |
| DOD Business Systems
Modernization |
1995 |
| IRS Business Systems
Modernization |
1995 |
| Protecting the Federal
Government's Information Systems and the Nation's Critical Infrastructures |
1997 |
| DOD Support
Infrastructure Management |
1997 |
| Strategic Human Capital
Management |
2001 |
| Medicaid Program |
2003 |
| Managing Federal Real
Property |
2003 |
| Improving and
Modernizing Federal Disability Programs |
2003 |
| Implementing and Transforming
the Department of Homeland Security |
2003 |
| Pension Benefit
Guaranty Corporation Insurance Programs |
2003 |
| Establishing Effective
Mechanisms for Sharing Terrorism-Related Information to Protect the Homeland |
2005 |
| DOD Approach to
Business Transformation |
2005 |
| DOD Personnel Security
Clearance Program |
2005 |
| Management of
Interagency Contracting |
2005 |
| National Flood
Insurance Program |
2006 |
| Funding the Nation's
Surface Transportation System |
2007 |
| Ensuring the Effective
Protection of Technologies Critical to US National Security Interests |
2007 |
| Revamping Federal
Oversight of Food Safety |
2007 |
| 2010 Census |
2008 |
| Modernizing the
Outdated US Financial Regulatory System |
2009 |
| Protecting Public
Health through Enhanced Oversight of Medical Products |
2009 |
| Transforming
EPA's Processes for Assessing and Controlling Toxic Chemicals |
2009 |
Alas, despite the comical notion of "government accountability," we can still imagine a room full of latté-drinking mental midgets listening attentively to what they believe to be breaking news; we can imagine their fingers scribbling away at newly devised plans for reformation; we can imagine them preparing for infinite inevitable boardroom meetings; we can imagine countless proposals for interventionist solutions, inspired by the broken window fallacy. And yet there is one thing we cannot imagine: the GAO bureaucrats accepting the solution of laissez-faire.
Jeremiah Dyke is a math teacher who hails free markets and freedom of choice. He invites you to contact him if you want to brainstorm. See his article archives. Comment on the blog.
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