Another massive loss for the USPS
From the WSJ:
The U.S. Postal Service on Thursday reported a $5.2 billion quarterly loss and said it was nearly out of cash and likely to exhaust its government credit line in coming months. . . .
The Postal Service's loss for its third quarter ended June 30 compared with a $3.1 billion loss for the like period a year earlier. Charges taken in connection to a mandate to prefund retiree health care drove the loss in the latest quarter, but declining first-class and advertising mail volume were a drag on revenue.
Mr. Donahoe said the Postal Service would pay its employees and critical vendors but might skip some payments to others.
He said current retirees aren't at risk of losing insurance coverage. While the Postal Service may tap all its credit from the U.S. Treasury by October, finances should improve later in the year with election mail and holiday deliveries propping up revenue, the agency said.
The Postal Service defaulted for the first time in its history on Aug. 1, failing to pay $5.5 billion for future retiree health benefits. A similar $5.6 billion payment is due at the end of next month. The agency said it wouldn't make that either, unless Congress acts. . . .
Labels: USPS
posted by John Lott at 8:19 AM
2 Comments:
I have heard these payments were forced on the Post Office by the Congress and they are so onerous as to amount to intentionally killing the Post Office, possibly as an end run around the Constitution. They are forced to pay something like 75 years in advance.
I don't like government run businesses, but I also don't governments that behave in such a fraudulent manner. The core business is profitable- so if they changed the constitution and sold it off without playing games, the price would be higher.
By pretending it isn't worth anything, the politicians will be able to give it away at firesale prices. More largess for corporate contributors, and much less advantage to the taxpayers as would have been in the former situation.
Technology took it's toll on the printing biz, and I see that same thing occuring here as well.
Catalogues are nearly a thing of the past. Direct mailing campaigns are probably being replaced with e-mail. Long distance call charges are nearly a thing of the past.
Snail mail just may go by the wayside as did the telegram, and for the same reasons...
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