No Bailout: Let the Post Office default, and really privatize the company

Just as there was no reason to bailout GM, there is no reason to bailout the USPS. Courts properly handle bankruptcy all the time. From the AFP:

The US Postal Service warned on Friday that it could default on payments it owes the federal government, just days after the US government itself narrowly averted a default.
The government's mail service said it lost $3.1 billion in the period from April to June, blaming "the anemic state of the economy" and the growing popularity of electronic communications over old-fashioned letters.
As a result of its mounting losses, the US Postal Service said it would not be able to make a legally required $5.5 billion payment in September to a health-benefits trust fund.
"Absent substantial legislative change, the Postal Service will be forced to default on payments to the federal government," it said in a statement. . . .

Of other interest: Postal Workers' Union Inaccurately Claims that the Post Office doesn't get Government Subsidies
Here is one story about how the post office has been run. A very long report is available here. Politico discusses it here.

In 2008 — one year before the Postal Service's long-term lease on the Sarasota property was to expire — the agency announced plans to exercise its option to buy the property for $825,000, a fraction of its estimated $12 million market value, the IG report said. The deal would have meant a big loss for the property's owners, Post Office Associates (POA), who bought it in 1988, the IG report said. POA's partners include Band Family Partnership Ltd. Douglas Band, who is Clinton's counselor and top adviser, has a financial interest in POA and is its legal representative, according to the report.

POA objected to the sale and the Justice Department in July 2010 filed a lawsuit on behalf of the Postal Service against POA to force it to sell the property. That lawsuit is still ongoing.

The IG's report said that the Postal Service's vice president of facilities, Tom Samra, "believed Governor Kessler's actions wasted Postal Service time and resources, and potentially weakened [the Justice Department's] litigation position."

The report found that Band enlisted Kessler to help scuttle the deal. Kessler held multiple meetings with postal officials urging them to settle with POA, the report said. Kessler was the only postal official urging a settlement, the IG said.

The IG said that Kessler also worked behind the scenes to help POA come up with a political strategy to fight the Postal Service: POA threatened to get members of Congress to intervene to quash the purchase on the grounds that this leasing program was improper and unfair. Kessler later raised similar concerns with postal officials, the report said. . . .