U.S. Post Office as Loan Company? An Idea Only a Socialist Would Love

The BlazeAs published in The Blaze:

Anyone who has followed British politics has watched the British Labor Party dive head first into the pool of the looney left. Their new leader, Jeremy Corbyn is an open member of the Loony Left — a British version of Bernie Sanders. The self-described democratic socialist proposed abolishing tuition fees, enactment of a “People’s Quantitative Easing” to fund green energy schemes, nationalization of public utilities and is calls the terrorists from Hezbollah and Hamas “his friends.”

Britain’s turn to the hard left is potentially a harbinger for the Democratic Party. For the first time, a majority of Democrats now favor socialism over free market capitalism. In this environment, it should come as no surprise that socialist presidential candidate Bernie Sanders (I-Vt.) can openly advocate policies that would emulate Corbyn’s open embrace of a government-run economy.

Does anybody really think it a good idea to put the Post Office in charge other services?
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Once such hair-brained scheme was initially proposed by Fauxahontas herself, Sen. Elizabeth Warren (D-Mass.). Warren dreams of replacing the private short-term loan industry with a government-run loan program run from the model of efficiency, the United States Post Office.

Sanders endorsed the scheme last week arguing that turning the post office into a bank would help the eliminate the need for check-cashing companies and payday lenders while infusing needed cash into the government’s dinosaur.

The Post Office lost $1.5 billion second quarter of 2015. Officials were joyous at the number as last year the Post Office lost $1.9 billion in the second quarter of 2014. In fact, the Post Office has lost at least $46 billion since 2007. Only in government, could an organization that is losing billions every year could propose entering a market with a near 40 percent default rate and think they could turn a profit!

According to the U.S. Postal Service Inspector General, they claim they would make $8.9 billion a year off of what they describe as “non-banking financial services.” The report lists “services could include reloadable prepaid cards with features that encourage people to save money, mobile transactions, and products that help the underserved take part in e-commerce. They also could include new ways of transferring money both domestically and internationally, and perhaps even include small loans that would help customers overcome unexpected expenses. As society becomes increasingly cashless, the Postal Service’s ability to provide a physical link to the new digital economy will become more and more vital.”

Does anybody really think it a good idea to put the Post Office in charge of all of these services? It is very likely that this will lead to massive cash flow losses by the Post Office and a requirement for even more overcompensated individuals to come work for the Post Office.

This isn’t the first time the postal service tried to become a bank. During the Great Depression, postal banks held a little over billion in assets but people soon realized that banks we better at being banks. Nearly 50 years ago, the postal service got out of the business as deposits declined precipitously. But bad ideas are like Dracula — they never really die.

With the left at war with short-term lenders, Warren and Sanders recognize that there is a need for so-called “payday loans.” They just don’t want anyone to profit from them — but the government. And we know that the Post Office will take a product that has proven profitable, and make it unprofitable in no time.

The postal service can’t deliver the mail, only a socialist would think they could turn a profit by becoming a lender too.