Ponzi Scheme: Congress Wants to Turn the US Postal Service… Into a Bank

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Top Tier Gear USA

(This post originally appeared at Sovereign Man.)

Post Office Truck

It’s news that seems ripped from the pages of The Onion. Or perhaps Atlas Shrugged.

But incredibly enough it’s actually true: earlier this week, Congress proposed a new law authorizing the US Postal Service to provide banking and financial services.

It’s called the “Providing Opportunities for Savings, Transactions, and Lending” Act, abbreviated as… wait for it… the POSTAL Act.

And it provides explicit authorization for them to provide banking services including checking and savings accounts, money transfers, and “other basic financial services as the Postal Service deems appropriate in the public interest.”

Bank of the Post Office. It’s incredible when you think about it.

The US Postal Service hasn’t turned a profit in a decade.

As a matter of fact, its total accumulated losses now exceed $51 billion, easily ranking it among the least successful companies in history.

And the only way USPS can continue to maintain its operations is with regular bailouts from the American taxpayer.

The statistics are just horrendous. Mail volume is down dramatically, which means that revenue continues to fall.

Yet the Postal Service’s expenses and pension costs keep growing, along with its debt.

Just like the US government, the US Postal Service has its own debt ceiling that’s set by Congress.

USPS reached this debt ceiling back in 2012 and has remained at that level for years.

The only way they survive is by moving liabilities off-balance sheet and regularly going back to Congress with hat in hand.

Wow, talk about a responsible financial partner– this sounds like EXACTLY the place we should want to deposit our hard-earned savings!

Seriously, why would these people even consider an idea so absurd as to let an organization with a history of failed operations take over people’s savings?

Simple. It’s a cheap source of capital.

The Postal Service desperately needs cash. So what better way to raise capital than to sucker unsuspecting Americans into opening up Postal bank accounts?

When you deposit money in a bank, you are effectively loaning the bank your money.

In exchange, they pay you a whopping 0.01% interest.

This is what almost all banks do– they borrow money from depositors and (hopefully) make credible investments and loans with other people’s money.

Except in this case, the Postal Service needs to ‘borrow’ depositors’ savings to cover losses from its other operations.

There’s a term for this. It’s called a Ponzi Scheme.

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  • Jonny rRingworm

    Just what we need….wait for it…..another U.S. government bank…..

  • Mike

    Yea, just what we need, the government running the banks as poorly as they run the VA. NO THANKS.

    • I guess you are too blind to notice that the government has been mismanaging the banks through their vassals at the Federal Reserve since 1913. The VA was created to blow off veterans, not help them.

      • Mike

        No, not blind to that, but they have not been mismanaging those in so much as they have been helping their wealthy banker benefactors. Now they just want to have their own bank to run as poorly as possible.

        • And they’ll be holding a gun to your head to make you use it, even if it is the only one that is still open?

  • Frank

    Just another step in the ever-expanding size of government and hair-brained schemes to suck more money out of The People to finance a corrupt, debt-fueled national budget. This is not any solution to the problems of the USPS, but the free- and unlimited-spending government bureaucrats just don’t have the common sense to realize it.

    • The USPS has the best delivery record of any of the major package carriers, as well as the best rates. Since I don’t have any other way to receive mail at an address that I can call my own, I have to have a mailbox, and because all private mailboxes are regulated by the USPS, the price is the determining characteristic. My post office box does the job for less than any private provider of mailboxes.

      • Frank

        I agree that the USPS does a service to the nation, right down to the individual Poastal customer, that should not be turned over to a private/commercial, for-profit enterprise. Although, it does need to be in the hands of competent and honest adminstrators. I vaguely remember reading an article/editorial, a couple of years back, that claimed that the USPS would be solvent and somewhat profitable IF the Congress did not regularly loot the USPS coffers and “reallocate” those government funds to other programs – same as they do Social Security when the program builds up a “surplus.” (More research needed to confirm this claim though.) After looting the funds from marginally solvent programs, such as the USPS and SS, they (the government/Congress) turn around and claim that they need to increase fees and taxes to “fix” the “insolvent” programs – placing the blame for malfeasance on the USPS administrators as they go groveling to Congress for more money. Its like a drug cartel using a “front business” to launder their drug proceeds. Can we get a Congressman to present legislation to stop this cycle of (looting) to justify higher fees on the captive program participants and increased taxes? Where does the money go? More and more give-aways to those that haven’t contributed or don’t produce – when we could actually cut spending and get back to reality, if it weren’t for the corruption and political pandering.

  • Since the USPS has sold rock-solid money orders that can be cashed at any post office, they have become the bank of choice for those who cannot get or afford an account at a regular bank. There are still sellers who will only accept payment in blank postal service money orders, because they can be cashed with fake identification after the pseudonym has been written into the payee field. I wouldn’t be surprised to find blank postal service and other money orders being used as currency after the banks go down.

  • Sam300


    When you borrow money from a bank or a private lender or don’t pay your credit card and let it go into collections……NONE OF IT IS COLLATERAL backed so these places can sue you (if they want to spend a lot of money) to try to get their money back but you can’t get blood out of a turnip. In 7 years, you request the IN WRITING (NEVER DO IT ON -LINE) for the bad credit mark to come off your credit report . 7 years is by fed law how long that debt stays on your credit report. Each state has its own laws on how long a lender can keep coming at you for a debt about 3-10 years with Alaska being one of the longest which I was surprised by. I think FL is about 5 years so Florida debt holders sell the debt to a collection agency at 5 years and the collection agencies harass idiots who pay that debt when they don’t have to. FYI…if your debt is 4 years old and you make a PENNY payment…you stupidly RE-SET that 7 year federal clock that debt stays on your credit report back to 7 years when if you had not made a payment, it would be off your credit report in 3 years. DUMB DUMB DUMB. And, do NOT believe a collection agency if they say they will remove it from collections if you pay it….GET THAT IN WRITING FIRST……I have never seen them do it. Or they will close the debt if you pay a portion – NOT GOING TO HAPPEN. You just re-set the 7 year clock and they sell the remainder of your debt to some other collection agency to hound you.

    Obviously if you made a collateral loan (car house etc) then the lender will take your car or house if you don’t pay.

    Back to the FEDERAL POST OFFICE giving you a loan. THAT loan is like a student loan or an IRS debt……YOU WILL NEVER – EVER be able to get rid of it. You must pay it. Borrowing money from the government is like borrowing from the devil. You will go to your grave owing the government money and the government will take every penny dead or alive.

    • Why would anyone with an IQ above a carrot’s borrow money in the current economic environment?

      • Another Thought Criminal

        Didn’t you read what he wrote? They can’t force you to repay it. So, why wouldn’t everybody buy as much food stockpiles and survival gear they could with debt in this “current economic environment”?

        • All they have to do is pass a law and they can put you in jail for theft, if they can prove that you knew you could never pay it back. Are you a previously unknown criminal, and why should we trust you?

          • Another Thought Criminal

            They can put you in jail for anything. Heck, you just pointed out they could just pass an ex post facto law.
            LOL, that used to be unconstitutional; back when we had a constitution.

          • We still have a Constitution. There are too many people who treat it like you do the laws prohibiting theft. You don’t appear to know what ex post facto means.

          • Another Thought Criminal

            Debt is created out of thin air. You worry someone is going to steal thin air?
            I do know what ex post facto means; you commented “all they have to do is pass a law” passing a law after something occurs is like the actual definition of “ex post facto”
            Anyway, not realizing the constitution is gone, therefore not realizing it needs to be taken back is the problem.
            I’m sure you don’t want to try and show me how we still have a functioning constitution, since I know from your past comments that you don’t believe that.
            The whole system is being crashed by criminals, there’s no benefit to taking the high ground.

          • Your actual definition of ex post factor is as specious as your concept of debt. Since the Constitution only exists to those to whom it matters and nothing so sensible seems to matter to you, it seems that you done as much as any other low-information person to kill it.

      • Sam300

        Desperation. If you old car breaks down and you are living pay check to pay check and don’t have any savings because not making interest on the bit you do save and everything else goes to taxes, inflation , utilities , food gas, etc. You need that car fixed and so take a pay day short term loan

        • Saving money better spent on keeping essential resources useable is an indicator of the inability to make reasonable budgetary decisions, and a real good reason most payday loan places wouldn’t grant the loan without better collateral.

          • Sam300

            If you don’t have a job or a just a part time job…it is impossible to save any money. Some people are stringing along 2 or 3 part time jobs.

            Don’t forget…they don’t get health care in their jobs…so they are going to get SLAMMED with ObmaCare costs

          • I haven’t had healthcare in my job since Jan 2015, and I was exempt from Obamacare 20+ years before it was passed. I haven’t filed a tax return since 1992, and won’t unless it benefits me. Since mid-summer, I was making $367 a week and saving from $500 to $1000 a month, because I have made a point of living well below my means and out of debt for over 30 years, in expectation of what is on the horizon. I am currently laid off from a job that I was assured wouldn’t do so, and doing fine on $290 a week in unemployment for 21 weeks, if I need it that long. I just put $500 away in savings two days ago. Americans have long had a problem with putting off gratification, and they complicated that with going into debt to buy what they didn’t need, which I may wind up buying for pennies on the dollar. The only way out of this mess is to not be in it. Exacerbation of the mess is an ignorant man’s game that I won’t play.

          • Sam300

            How do you get away with not filing an income tax. I did not file for 5 years in a row and the IRS tracked me down everywhere I went – even to Korea. did not owe them money…they owed me. However since I did not file….the IRS filed a claim for me (Or for you if you don’t) and they make it so you owe them. Their 5 year filing for me….said I owed them $15,000.00 including interest and penalties. . What a load of bunk. I hired a local accountant to do my taxes (he had 26 years experience) and the IRS owed me $12,0000.

          • It is a contractual relationship with a private corporation, what the IRS is, like the Federal Reserve. If you have ever written a check to the IRS, tell us what the endorsement made when it was deposited says. I treat it like the sleeping pit bull that it acts like, letting it sleep.

      • Janinesbailey3

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  • Ponzi, or better, Madoff, scams are never intended to raise funds that will ever be repaid. This is evident because both Ponzi and Madoff spent everything they didn’t need to pay dividends to their victims. The only source for reparations were from recoverable funds.

  • Sam300

    This explains why Obama went after Pay Day Lender businesses – telling banks to close these type of accounts so businesses went off business if they could not find a bank to do business with. They wanted to get rid of the post office pay day lender competition.

    The feds want to be the only pay day lenders – screwing poor and middle class and desperate people who have no job, bad paying jobs or other financial problems.

    • I’m hoping that the morons in Bentonville will recognize that they could make a lot of money by leveraging their vast cash receipts and reserves to purchase otherwise useless paychecks in miniarbitrage.

  • doucyet

    This is the most corrupt government on the globe…and the liberals are just to stupid (trained) to see it.

    • Are you inferring that the liberals are not part of it? How could they not see themselves?

      • doucyet

        To answer your questions. No and they’re to stupid!

        • At least they know the difference between “to” and “too.”

          • doucyet

            You know all of them do you? Or do you just speak for them?

          • There are only three homonyms: to, too, two.
            Which ones are you unclear about?

          • doucyet

            Oh surely you jest………..they elected obama, twice! They are that stupid. The question remains are you their spokesperson?
            The only thing I’m unclear about is why you’re such a dick? Surely it’s because you’re a liberal, but then again it could be that’s it’s simply because your are a dick. Which is it……….?

    • Plextt Plextt

      Liberals, Republicans, and Democrats are nothing more than three blind mice that are stuck in a ditch while aimlessly bumping heads=) The weakest of the three are religious republican gun freaks=) Good luck finding a way to think logically…

      • doucyet

        The weakest among us are those people that think that logic has anything to do with the conditions in this world today or ever for that matter……….

  • Phar Ma Doc

    Ex-US and in Europe in particular, post offices (ALL governmental agencies) have a passbook-style banking system. Marketed to kids and elderly – you bring in small amounts as deposits and can withdraw with parental approval if a minor. No loans, no mortgages, no CD’s.

    I can see such a system utilized by cash-only workers, at least for as long as cash continues to exist.

  • Jen

    This author is wrong on many counts. The Post Office does not get tax payer funded bail outs, that is a lie. Also, they do repeatedly post profits, however, they are robbed by the federal government which requires the PO to pre-fund retirement benefits for employees that haven’t even been hired yet! No other company anywhere has to do this. So when you hear someone say they are losing money, it’s only due to this requirement.

  • CherryAnn1000

    Only Congress could come up with such an incredibly stupid idea. Banking at the PO??? Seriously?? I don’t even trust them to get what few things I mail to be to their destination, much less trust them with banking. Anyone who signs on to this little endeavor is insane.

  • icetrout

    USPS went downhill when blacks took over… & the morons want to turn it into a bank… now the Postal Employees can just skip stealing packages & just take cash… 🙁

  • TanDaLayO

    This is how the New Zealand and Aussie post offices are run. You are able to get a card…and load money on it..to be used like a CC. The post offices sort of ‘do it all’ in these countries…and it’s a monopoly…by the way..but accepted by all.

  • Helmut Beintner

    Thats a new Idea?
    Germany has that already for Years.
    So this will not be a US government idea,since the are totally clueless and grasping for straws to save their skins.

  • Roy Patterson

    I like the idea.We need someone to compete with the banks. Why not the USPS.