Wednesday, August 22, 2012

Why the Postal Service Is Going Out of Business

U.S. Postal Service May Be Going, Going, Gone, article.
"if we don't react in a smart, appropriate way, the postal service could literally close this year." 

Why the Postal Service Is Going Out of Business, article.
Think about the Post Office’s value proposition.  They send someone to almost every single home and business in the entire United States 6 days/week on the hope that there will be a demand for their service – sold at a starting price of 44 cents!  For that mere $.44 they will deliver your hand crafted, signed message anywhere else in the entire United States!

I would be sad to see the global postal system go. They may not be the fastest thing around, but they reach any place, and nobody can come close to competing with their price on physical letters or parcels. Maybe they should be allowed to raise their prices a bit, it's better than collapse of one of the most important communications systems on the planet.

Pat points to this interesting article:
In 2006, Congress passed the Postal Accountability and Enhancement Act.  This law requires the Postal Service to do something that no other business or government agency has to do–pre-fund its FUTURE retiree health care benefits.  This is a 75 year liability that has to be paid in 10 years.


Kent McManigal said...

In our town they do not deliver to our houses. To get our mail we must go to the post office. But that's OK.

What gets me is that people think the end of the US Postal Service would mean the end of mail delivery. The only reason the post office is still "necessary" is because it is illegal for any other business to deliver "first class mail" (letters, bills, and that sort of thing) or place anything in the mail boxes at homes or businesses. Get rid of the counterfeit "law" and let the market step in to provide the service. Then, as soon as it is no longer necessary, let the government postal service die.

Pat McGee said...

I can't find the link now and I have no idea how true it really is, but it sounds reasonable to me. Someone wrote that the real reason the USPS shows a big loss is that Congress required it to fully fund retiree benefits in the current fiscal year. That's really strange since no for-profit company is required to do that - they get to spread the charges out over multiple years.

If that's really true, then some US Congresspeople are trying to kill the USPS. And it looks like they will succeed.

Pat McGee said...

Duh, a quick Google search showed a lot. Here's a statement from a postal worker union official claiming the same thing: