A big surprise
From
ABC News:
U.S. Postal Service Nears Default
As the U.S. Postal Service begins shuttering offices across the country to stem their ever-growing $9.2 billion deficit, the entire agency now faces default and could shut down next summer, USPS spokesman Dave Partenheimer told ABCNews.com today.
"Right now we think we can make it through until next summer most likely but then some hard choices will have to be made," he said. "That's why it's such an urgent crisis."
USPS owes $5.5 billion to fund future retirees' health benefits, and next year it may not have money to pay its 560,000 employees. Partenheimer said that by Sept. 30, the end of the USPS fiscal year, the agency will have reached its borrowing limit of $15 billion.
"That's why we cannot make the payment of $5.5 billion," he said. "Something we desperately need is action from Congress to operate more like a business. That's why we're looking at other proposals to save us money."
Unions making promises that the employers cannot keep -- works great when the economy is booming and revenue keeps rising but when the economy adjusts (as it always does), there is no safety blanket.
And of course, they are quick to place the blame:
"Snail mail" has been on the decline for years due to email and electronic bill paying, but the USPS has yet to adapt, clinging to a traditional brick and mortar model.
A March 2010 report from the USPS highlighted a 17 percent contraction in mail volume between 2006 and 2009 due to "e-diversion, ad spend shift and the economic recession," resulting in $16 billion less revenue. The same report projected a 37 percent drop in first-class mail over the next 10 years.
And email has been in common use for the last ten years? The Post Office has had ten years to see the effect and adapt -- commercial businesses have done this, why not the Post Office.
Posted by DaveH at September 6, 2011 12:09 PM