Postal Banking: Continued

A previous post on Liebrary.ca brought attention to the benefits of Postal Banking in Canada.

The US also has a history and new push to establish postal banking. Ellen Brown of The Web of Debt Blog, recently posted an article entitled The War on the Postoffice.

Ellen brought attention to a group of under-serviced or concerned American citizens who believe the current system emphasizes private profits over public interest. She also pointed out the often unfair advantages the USPS (US Postal Service) is subjected to while competing with modern delivery services offered by companies like UPS or Amazon. As part of the Postal Accountability and Enhancement Act (PAEA) of 2006, the USPS was required to provided health benefits to its employees for 75 years or future generations of family that were not even born yet. Therefore, it is a requirement for the USPS to maintain operational cash to support the bill. This contrasts with its competitors who are not under the same restrictions.

This really is about the classic socialism vs capitalism scenario and yet US citizens are still required to back either system. For example, private banking is supposed to operate in a competitive market place where the fittest, most innovative will survive although, the US banking system has guaranteed deposits. This means if a financial institution mismanages your deposits then the government will supply financial support via federal reserve funding which is backed by US tax payers. This would be the same for postal banking deposits, it would be guaranteed by the government backed by taxpayers. The only difference is private banking corporations are accountable to the shareholders, board of directors and a mandate to generate profit. However, public services through USPS would service only the public but offer benefits like health care for 75 years and future generations. One might say that private banking is more efficient and profitable to its shareholders but then the public mandate considers the social conditions of its citizens and better reflects the needs of people.

At the very least there should be two conditions to conduct banking in the US. All institutions should have the same parametres to operate within the industry. Private companies should provide a basic level of benefits compared to public interest so Amazon will have to provide 75 years of health benefits to its employees. Second, Postal Banking should be allowed to proceed if it can be profitable, as assessed by the USPS board of directors. This provides another option in the free marketplace and the clients can choose which system benefits them most. If the US tax payer backs either system why should government dictate which services the nation should or shouldn’t have.