The collapse of the U.S. Postal Service is rivaled only by Europe’s ongoing currency crisis as the slowest train wreck in progress. As in Europe, every month brings more bad news about the USPS’s shaky finances, and as in Europe, politicians seems unable or unwilling to make the necessary but difficult institutional changes.This week, the Postal Service announced that it plans to default on a $5.6 billion dollar payment. As the WSJ notes, this will be the second time in as many months that the agency has defaulted on a billion-dollar obligation.Aside from the usual partisan sniping in the press, no action from Congress is forthcoming:
Congress had made allowances in the past for delayed payments—the original due date for the August bill had been September 2011—but lawmakers didn’t take action ahead of last month’s new deadline and appear unlikely to do so in coming days.“Comprehensive reform of the laws governing the Postal Service is urgently needed in order for the Postal Service to . . . return to long-term financial stability,” the agency said in a statement. “Absent legislative action, the Postal Service is unable to make a scheduled $5.6 billion payment to the U.S. Treasury.”
The Postal Service’s problems are serious. Revenues are still falling from decades of technological broadsides from email and the web. Meanwhile, the agency has a massive, unionized workforce with pensions and benefits that were negotiated when times were better but are ill-suited for the present. Worst of all, as a semi-public institution, the USPS has to play “Mother May I” with Congress, which prefers to use it as a political piggybank and patronage ATM rather than to allow it to radically restructure in order to survive on its own.But fortunately, as we’ve noted, the Post Office has a genius plan to fix all its problems. It’s going to offer junk mailers better deals so they will stuff our mailboxes with even more worthless garbage. An insolvent organization delivering stuff people don’t want while seeking subsidies we can’t afford: a fairly typical example of late stage blue hard at “work”.