Bernie Goes Postal

Government banking – it’s an idea whose time should never come.

Vermont senator and presidential candidate Bernie Sanders disagrees.

America’s reddest Democrat advocates turning the United States Post Office (another failing government-run operation) into a kind of Big Brother Bank. He figures the same joint that has trouble delivering your mail can be entrusted with your money … with Uncle there to bail out the operation, in the event things don’t work out.

Which of course they probably wouldn’t.

The USPS has a track record of failure. Of financial failure. This outfit has been hemorrhaging other people’s money for decades. Instead of trying to figure out how to deliver the mail without running a deficit, the USPS wants to “branch out,” kind of like a kid who broke something and can’t figure out how to put it back together… and has begun tearing something else apart.

Sanders touts his proposal as a way to help the poor – but as is typical of socialists (and Bernie openly embraces the title) he wants to “help” them with other people’s money.

Taxpayer money.

Your money.

That’s who would underwrite Bernie’ Banks.

Apparently, the billions the USPS has lost thus far isn’t enough. Why should it be, when the taxpayers’ pockets are bottomless (at least, as far as Sanders is concerned)?

Inspector General of the USPS David C. Williams thinks all of this is a great idea. In fact wants to one-up Bernie by having the Post Office get into lending and issuing debit cards to people, too (see here). In a report released last January, the inspector general describes all this as “non-banking services for the underserved.”

Come again?

USPS would handle people’s money, loan them money… but Williams does not consider such activities “banking services.”

He must also believe that the people waiting on line at the DMV are “customers,” too.

Ignore the word games. Follow the money – it’s the first thing they teach in journalism school.

And there’s lots of money at stake here.

While it’s true that private banks have been bailed out by the government, they do not have a financial umbilical cord to the taxpayer till, as the Post Office does. It is billed as an “independent agency of the United States government,” but it is funded via subsidies to the tune of $18 billion annually (see here) and the 600,000-plus postal employees are government workers, just like those at the DMV.

It is also a monopoly – a legal one.

While there are private delivery service for packages such as Fed Ex, only “U.S. mail” can be placed in mailboxes, making it very hard for private mail-delivery services to compete with the USPS.

Which may have something to do with the poor service – and high cost – of the USPS. Which Sanders wants to “fix” by turning the USPS into a government Frankenstein Bank.

What will happen when this unaccountable – to the market – government make-work project gets involved with handling people’s money? Issuing debit cards – and making loans?

Last year alone, the USPS lost $5.5 billion by its own admission. Does that sound like an outfit you’d want to entrust with your money? With more money?

With anyone’s money?

Sanders sees this scheme as way to undermine short-term lenders (aka payday loans) which he regards – with the despotic paternalism typical of socialists – as “exploitative.”

Yet the short-term lenders haven’t got Big Brother backing them up, forcing people to do business with them.

Or subsidize them.

They assume disproportionate risks when lending to people with little (and sometimes) no credit history, who are often marginally employed – and who frequently welsh on their debts. It’s easy to demagogue the issue via portrayals of hard-working but cash-strapped people who are “taken advantage of” by these lenders – but the reverse is more often true and that’s rarely examined, much less sympathized with.

How likely would you be to loan your brother-in-law (whom you knew to be a risk) a sum of money without precautions? And if he stiffed you, would you be likely to make another loan to his wife without taking additional precautions?

Also: Short-term lenders aren’t looking to you to “help” when things don’t pan out and they end up in the red. They are subject to market forces, which keep them in check by holding them accountable.

What Bernie proposes is to eliminate these checks and balances by foisting the responsibility – and ultimately, the tab – onto the backs of taxpayers.

That’s Bernie’s brand of “Democratic socialism.”

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