Monday, August 17, 2009

Post Office Going the Way of the Dodo…

According to a recent CNN article , “Americans have mailed 20 billion fewer items this year than they did last year. Over the past 20 years, some 200,000 mail-collection boxes have been removed from U.S. streets because not enough people were dropping their letters into them. The Government Accountability Office has officially declared the Postal Service to be a high-risk agency.”

Let’s face it, just like newspapers, most of the things that are truly needed to be sent via the mail can be easily sent electronically. There are exceptions, of course, but volumes are plunging and we now have other means of delivery such as Fedex and UPS. The only fortunate aspect of their continued existence is that my favorite pizza parlor still sends out coupons the old fashioned way! In fact my junk mail now greatly exceeds my regular mail.

Hey all you coupon snobs, if there was $3 cash in your mailbox would you not pick it up and put it in your pocket? I know, I know, but all you high fallutin’ McMansion owners had better learn to get the scissors in action! Oh yeah, I know how you think, I was one - LOL!

And speaking of Dodo birds, today we learned that Reader’s Digest – a favorite of my grandmother’s – will be missing a $27 million coupon payment and will be filing a prepackaged chapter 11. Yep, things that have to do with good old fashion paper are definitely in retreat – Newspapers, magazines, and the U.S. Postal Service.

And I’ve been reminding people that the government is spending WAY more than they take in, that is hitting home to the Post Office. It seems that they are running into cash flow problems and will be making only partial payments to their retired employee’s health care fund by the end of September.

Here’s a transcript of Postmaster General John E. Potter’s testimony to the U.S. Senate on the 6th of this month:

So, since the Post Office’s expenses far exceed their income, they first want to cut general mail delivery from 6 days down to 5. I think you can count on that happening, and kiss Saturday delivery goodbye:

In Mr. Potter’s testimony, he next targets his retired employee’s health care. Hmmm… why is he talking health care now? Hmmm… He’s not talking about missing payments to his retiree’s pension plan, no he’s talking about the burden of his retiree health care plan:

Note that their financial position has deteriorated “FAR BEYOND EARLIER PROJECTIONS!” Haha, nice forecasting. But note that they say without this particular expense that they would have been closer to profits! No kidding? How much closer would they be if they just ended all contributions to retirement at all?

You see, they are having a liquidity crisis. So, unless they are given more taxpayer money (or, unspoken here, universal healthcare comes to pass), then they are functionally bankrupt and are going to stop paying into their retiree healthcare fund.

In other words, they miss their own forecasts and then short change the retirees to whom they have promised healthcare. A time honored business tradition whereby the rule of law protects the central banker holders of fiat money debt before it protects those who have worked their entire lives.

But I digress.

This is about money and it has to come from someplace. One way or the other, it’s going to come from YOU! Oh, and if you’re counting on your retirement “dream” – hold on tight!

Electric Light Orchestra - Hold on Tight: