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Postal Service Is Nearing Default as Losses Mount [Coming Soon Major Government Bailout!]
NYTimes ^ | September 43, 2011 | STEVEN GREENHOUSE

Posted on 09/04/2011 7:39:45 PM PDT by Steelfish

Postal Service Is Nearing Default as Losses Mount By STEVEN GREENHOUSE September 4, 2011

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 doesn’t act, we will default.”

In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agency’s 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 agency’s work force — despite a no-layoffs clause in the unions’ contracts.

The post office’s 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.

(Excerpt) Read more at nytimes.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: postalservice; usps

1 posted on 09/04/2011 7:39:48 PM PDT by Steelfish
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To: Steelfish

This has already been posted.


2 posted on 09/04/2011 7:43:01 PM PDT by caper gal 1 (Rubio/Ryan Ryan/Rubio 2012)
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To: Steelfish
“If Congress doesn’t act, we will default.”

Of course Con-gress will act. It one of the things they are actually supposed to do.

3 posted on 09/04/2011 7:46:10 PM PDT by Sarajevo (Is it true that cannibals don't eat clowns because they taste funny?)
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To: caper gal 1

Oops.


4 posted on 09/04/2011 7:46:20 PM PDT by Steelfish (ui)
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To: Steelfish

and laying off 120,000 workers — nearly one-fifth of the agency’s work force


This layoff will dwarf the effects of any Stimulus progrma Obama proposes.


5 posted on 09/04/2011 7:58:26 PM PDT by rbg81
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To: Steelfish

End the postal monopoly. Let Fed Ex do it.


6 posted on 09/04/2011 8:05:16 PM PDT by Tribune7 (If you demand perfection you will wind up with leftist Democrats)
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To: Steelfish

End the postal monopoly. Let Fed Ex do it.


7 posted on 09/04/2011 8:05:40 PM PDT by Tribune7 (If you demand perfection you will wind up with leftist Democrats)
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To: rbg81
The system will handle an estimated 167 billion pieces of mail this fiscal year, down 22 percent from five years ago.

10 years ago my wife and I probably mailed about 12 first class letters (bills) a month. Now we are down to 1 or 2. My company stays awake at night trying to think of ways to reduce USPS costs. And they are succeeding. The USPS is DOA. Wow. This will be painful to watch. In five years their workers will be milling about, with nothing to do.

8 posted on 09/04/2011 8:10:50 PM PDT by ExtremeUnction
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To: Steelfish
the agency is so low on cash that it ... may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.

Sounds like a headfake to me. I'm sure Congress will fall for it, too.

9 posted on 09/04/2011 8:16:44 PM PDT by freespirited (Stupid people are ruining America. --Herman Cain)
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To: ExtremeUnction
a couple of years ago, when my dtr was getting married, she actually went to a postal anexx to ask about postage, and was told..one stamp.....nightmare scenario we had some invitations come back because not enough postage was paid....worse yet, I think some of our invitees got dinged for a dime or so at the time of delivery....

postal service can go take a flying leap IMO...

10 posted on 09/04/2011 8:16:50 PM PDT by cherry
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To: Steelfish

WHEN YOUR OUTGO EXCEEDS YOUR INCOME, YOUR UPKEEP WILL BE YOUR DOWNFALL.

( Maybe I should snail-mail that Paul Harvey quote to them? Darn! Where is that stamp!? )


11 posted on 09/04/2011 8:18:24 PM PDT by Graewoulf ( obamatrauma"care" violates the 1890 Sherman Anti-Trust Law.)
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To: Steelfish
As far as the postal service officials trying to shock us into an enormous allocation - I say, go ahead and make my day! Think of the energy savings possible by accelerating the move away from physical/postal mail to electronic communications. Here's a green subsidy we can all (well, except for the postal unions) get behind.
12 posted on 09/04/2011 8:18:29 PM PDT by Wally_Kalbacken
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To: Tribune7

“( - - - End the postal monopoly. Let Fed Ex do it. - - - ) “

Maybe this Federal Monopoly also violated the 1890 Sherman Anti-Trust Law?

I KNOW that obamatrauma”care” does.


13 posted on 09/04/2011 8:24:46 PM PDT by Graewoulf ( obamatrauma"care" violates the 1890 Sherman Anti-Trust Law.)
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To: Steelfish

Fedex and UPS will NOT deliver mail to rural areas, which already have a lack of postal services. Not everything can be done on line, and internet is also NOT available in a number of rural areas in the country. The problem is to make the postal service deposit in advance far more into the health services for the future of retirees and employees. The next problem is that postal service labor contracts are out of line when compared to other federal employees. These need to be changed immediately. Do close some post offices, but consider branches in stores like Walmart, small contract units in strip malls etc. Do continue services in rural areas, and places for elderly who can no longer drive.


14 posted on 09/04/2011 8:33:53 PM PDT by Grey Eagle
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To: Steelfish

A bailout will not increase the usage of USPS. It will be like the stimulus, it will only increase the deficit.


15 posted on 09/04/2011 8:39:20 PM PDT by Know et al (The most potent weapon in the hands of the oppressor is the mind of the oppressed.)
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To: Steelfish

Well, if the USPS had not invested its $billions of surplus in housing derivatives and lost it, it might be in better shape, but alas....now it wants to be exempted from paying FERS for it’s retirees, claiming somehow it overpaid $75billion into the fund (but of course the money’s gone...somewhere). It was forced to put up $billions in ‘escrow’ to FERS in 2007 (for some reason) that zapped it’s surplus. Now of course, it wants us to pony up for it instead.

Funny isn’t it. In 2005 all it’s debts were paid and it had a surplus. Then in 2007 the commiecrats got congress and everything’s gone to hell in a handbasket since.


16 posted on 09/04/2011 8:45:52 PM PDT by RowdyFFC
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To: freespirited

Just in time for Christmas!


17 posted on 09/04/2011 8:47:45 PM PDT by Tai_Chung
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To: Grey Eagle

I dunno, FedEx and UPS both deliver to my sons house in the boonies in Indiana...and they deliver to my house 12 miles out of town and to people all up and down our county road. I have a buttload of company checks sent to my house, simply because the postal service has this nasty habit of putting customer checks in other people’s mailboxes and when they put them back in their mailbox marked ‘wrong mailbox’ the dumbass postal service sends them all the way back to Atlanta to a returned mail center instead of the local post office to re-deliver.


18 posted on 09/04/2011 8:58:42 PM PDT by RowdyFFC
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To: Steelfish

Instant Fix:

Kick out the unions and lower the pay scale for those making an unreasonable amount of money for the work they do.


19 posted on 09/04/2011 9:15:28 PM PDT by Revel
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To: Tribune7

Yes, but it is not that easy. Remember that people who live out in the boonies get the same mail delivery as people in more densely populated areas. Ditto for post offices in rural towns. A real business entity will want to charge people more for delivery in different circumstances. I can just hear the farm state politicians of both parties howling if rural residents had to pay more for their mail service and postage. Once a government program is entrenched, it is awfully difficult to undo.


20 posted on 09/04/2011 9:39:10 PM PDT by Pining_4_TX ( The state is the great fiction by which everybody seeks to live at the expense of everybody else. ~)
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To: Steelfish
Exhibit # 1 for the competency of govt. run enterprises.

vaudine

21 posted on 09/04/2011 9:40:35 PM PDT by vaudine
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To: Steelfish

So USPS and Congress have been jaw-flapping for the past five years about eliminating Saturday delivery.

It’s totally obvious that a letter carrier/mail truck/counter person/ management can work for five days, but it takes rotating shifts to provide coverage for a six day schedule.

USPS dithers!

The cost savings could be enormous, and even if critical bill payments might not be delivered on Saturday, so what, there’s no-body home to process them on a Saturday, and a bank will credit the payment as of Monday night.

How long does it take the A-holes in congress to authorize a five day per week mail schedule???

Probably about $8-16 billion dollars ago.


(Here’s an idea! Allow the USPS to move certain losing operations off balance sheet. Take all the closed post offices off their asset schedule. Create a company called “the Old Post Office”, and dump all the losers into this Old hopper. Let the old owners own this old company.

Then re-emerge as the new efficient post office, issue new stamps and a new marketing plan, maybe even tout how their trucks are “green”.

Wonderful, and the public will soon forget about all the swamp sludge included in the “Old Post Office. What a winnning formula for total financial success!

Oh, wait a moment! Did someone say the GM financial model??

But, it’s not comparable, the Volt auto and mail truck adaptation will be a breakthrough success - just you wait and see!


22 posted on 09/04/2011 9:52:25 PM PDT by Noob1999
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To: RowdyFFC
May I also relate - as an apartment dweller, that the post office considers “junk mail” VERY IMPORTANT, and trashes my tiny mailbox with it twice a week.

I have no option to refuse it, and am forced to sort through it to find the few pieces of mail addressed to me specifically for business or personal reasons.

The USPS raised the price of postage for all desired correspondences, and lowered it for junk advertisers, scam mailers and what we on the internet call spam.

Cut out Saturday deliveries, and increase costs for unsolicited mass junk mailers.

And yes, they are going to have to fire a large number of their bloated staffing level of union employees.

23 posted on 09/04/2011 10:02:11 PM PDT by sarasmom ( A Fine is a Tax for doing wrong. A Tax is a Fine for doing well.)
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To: Steelfish

The post office needs to get out of the affirmative action hiring business, sell off all the bulk mail division and deliver mail three days a week. Damn what a mismanaged outfit.


24 posted on 09/04/2011 10:24:00 PM PDT by org.whodat (What does the Republican party stand for////??? absolutely nothing.)
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To: Grey Eagle

Why not have people pay for home delivery?


25 posted on 09/04/2011 10:50:58 PM PDT by RobbyS (Pray with the suffering souls.)
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To: ExtremeUnction
10 years ago my wife and I probably mailed about 12 first class letters (bills) a month

Hardly anyone sends personal mail by USPS except for birthday and Christmas cards. Years ago I figured that once billing switched over to the internet for both sending out bills and sending in payments, the volume of mail would collapse. We're now to that point.

26 posted on 09/04/2011 11:04:34 PM PDT by Paleo Conservative
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To: sarasmom
The USPS raised the price of postage for all desired correspondences, and lowered it for junk advertisers, scam mailers and what we on the internet call spam.

The only good thing about unsolicited junk mail is that none of it is pornographic, because that would violate federal law. Unfortunately, even if unsolicited pornographic email were illegal, it would be impossible to enforce a prohibition.

27 posted on 09/04/2011 11:08:56 PM PDT by Paleo Conservative
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To: Steelfish

Overpaid paperboys.

The Postal Service is obsolete. The only thing they now deliver is junk mail.

Privatize it, cut salaries by half and eliminate all of those benefits and it makes plenty of money.

This should be the quintessential minimum wage workplace of last resort.

A bankrupt America cannot afford to continue financing this bloated, obsolete featherbed.


28 posted on 09/05/2011 1:09:35 AM PDT by Bon mots ("When seconds count, the police are just minutes away...")
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To: Steelfish
LET ER GO! ! ! ! ! !
USPS not needed.
29 posted on 09/05/2011 2:20:19 AM PDT by DeaconRed (To the idiots that didn't believe us about ZERO: Hope you enjoy your less than a dollar in change.)
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To: Pining_4_TX
Remember that people who live out in the boonies get the same mail delivery as people in more densely populated areas. Ditto for post offices in rural towns.

Ending the postal monopoly is not the same as ending the USPS.

If Fed Ex (or anyone) starts up in a easy-profit market, then the USPS wouldn't have to serve it. This means it could shrink while still devoting resources to areas that private companies refuse to serve.

30 posted on 09/05/2011 5:10:22 AM PDT by Tribune7 (If you demand perfection you will wind up with leftist Democrats)
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To: Tribune7

True, but I don’t see how leaving the USPS with the money-losing part of the business helps it survive, nor does it save the taxpayers any money. The cold, hard truth is that people are going to have to start paying for what they get rather than have it subsidized by their fellow citizens.


31 posted on 09/05/2011 5:59:31 AM PDT by Pining_4_TX ( The state is the great fiction by which everybody seeks to live at the expense of everybody else. ~)
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To: Pining_4_TX
but I don’t see how leaving the USPS with the money-losing part of the business helps it survive, nor does it save the taxpayers any money.

It would have to be subsidized. It's a good point about whether there would be savings. I think there probably would as I think the USPS is losing money in places where a private firm would turn a profit.

Regardless, it shouldn't cost the taxpayer any more money than the periodic bailouts and many areas would get better service.

And it would be a first step.

Remember, there is no cost to putting the ink on the paper to end the monopoly and begin the competition.

32 posted on 09/05/2011 6:11:52 AM PDT by Tribune7 (If you demand perfection you will wind up with leftist Democrats)
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To: Tribune7

Sounds like a plan to me!


33 posted on 09/05/2011 6:17:40 AM PDT by Pining_4_TX ( The state is the great fiction by which everybody seeks to live at the expense of everybody else. ~)
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