Skip to comments.Postal Service Is Nearing Default as Losses Mount
Posted on 09/04/2011 7:16:33 PM PDT by caper gal 1
The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.
Our situation is extremely serious, the postmaster general, Patrick R. Donahoe, said in an interview. If Congress doesnt act, we will default.
In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agencys deficit, which will reach $9.2 billion this fiscal year. They include eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers nearly one-fifth of the agencys work force despite a no-layoffs clause in the unions contracts.
The post offices problems stem from one hard reality: it is being squeezed on both revenue and costs.
As any computer user knows, the Internet revolution has led to people and businesses sending far less conventional mail.
At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post offices costs. Labor represents 80 percent of the agencys expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.
(Excerpt) Read more at nytimes.com ...
Yes, unions can screw up even a decent business model. When business looses the ability to define what it can offer to employees in pay and benefits as a take or leave it proposition, the business is doomed to fail. The employees, for the large part, haven’t a clue about the simple concepts of overhead, cash flow, margin, or capital expenses. It is like letting the inmates run the prison or the lunatics run the asylum.
Yep, and proof that government entities cannot change with the times.
Weird how bad “spreadin’ the wealth around” has really screwed up the country. No money left!!! Looks like we’re going to need to print some more.
you know it can't be shouted loud enough....its the PENSIONS stupid....
This stinks. How will I pay my bills?
Is there a chance that 1st Class mail will go privet?
Ain’t no way, no how I will EVER do electronic payments. Way to easy for someone to hack you account and drain you of everything.
shut er down and sell off its offices
bills and junk crappola,
shut it down
Totally agree - the financial turn-around of Wisconsin’s school systems in the past several months should be all people need to know.
deja vu.....why does it seem we get a “oh poor government worker job needs a bail out” every month.
It seems to me this is a push to raise the stock price of UPS and Fed Ex to help the stock market.
My guess is that there is a LOT of money "left," but it has disappeared into the accounts, numbered or otherwise, of a relatively small number of people.
Lay off all those postal workers and close all those post offices and then see how even more middle class workers have no money to spread around to buy the services of people who are currently screaming, greedy postal workers lay em off let em suffer. JMO.
80 percent of the monthly recurring bills I used to send via USPS I now send electronically over the internet.
First privatize the Post Office. Shut the whole thing down on day two Sarah's presidency.
Then eliminate the department of education and the department of energy.
Take what is needed to run the EPA, cut it down to the bone, then turn it into block grants to the states to watch out for their own environmental standards.
We need a radical reduction of the centralization and maybe the Obama economic collapse is what it will take to wake up the clowns in Washington to the reality that we don't need half of the bureaucrats or their agencies.
In some ways I feel really bad for the Post Office. They’re suppose to be an “independent government business” that is self supportive. Yet they can’t do anything without the permission of congress. They can’t raise fees. They can’t close offices. They can’t really do anything, they’re hands are tied.
The Post Office simply needs to be sold for parts.
I say shut it down and let the private sector do the job more efficiently. Same with AMTRAK.
The Constitution could be interpreted to mean that Congress must establish a mail service, but could do so via a private agency.
Let advertisers pay for the junk mail.
Dump the Post Office.
Postal Worker uses citizen's garbage can as bathroom.
The Soviet Union collapsed because it could not pay employees.
I asked once just why is the post office losing money. Hardly anyone sends letters anymore, and think of all the transactions done by computers. And much if not all of the sorting is done by computers, too. The work load HAS to be less than it was 15 years ago. Less volume of work should lead to fewer humans “needing” to work for the postal service.
Sometimes, they can't do anything at all. The last two letters I mailed to my youngest son via USPS have been returned to me as "undeliverable." Each time I've had to go to my local post office where the postmaster sent the letter directly to the postmaster at his zip code city. The letters WERE then delivered as they should have been in the first place. If the USPS can't get a regular letter to a legitimate address, perhaps it's already failed or postal workers should have gotten training other than "diversity."
If anyone thinks the USPS will fall under, think again.