The postal services stands on the brink of bankruptcy thanks, in part, to a continuing shift to electronic communication.
The Postal Service is not thriving in the Internet age. In fact, it looks as though the worldwide web is succeeding where rain, snow, heat and gloom of night failed in limiting the delivery of the U.S. mail.
The continuing shift toward electronic communication, coupled with a prolonged economic downturn, has brought the U.S. Postal Service to the brink of bankruptcy.
The postal service will be insolvent by the end of September when it will be unable to pay a require $5.5 billion payment to a government retiree health benefit program.
“Bold action” action is needed to keep the postal service operating, said President Barack Obama in a jobs and economic recovery plan presented on Monday. The president proposes among, other things, reducing mail delivery from six to five days.
The president’s plan would also allow the postal service to increase postal rates and would return $6.9 billion the postal service has contributed to the federal retirement program. The postal service would also be allowed to sell an expanded array of items. According to the president, the reforms would provide the postal service with more than $20 billion in relief over the next few years, and would reduce the federal deficit by $19 billion over the next 10 years.
Postmaster General Patrick Donahoe attributed the agency’s budget crisis in part to a limited flexibility to respond to a changing marketplace when he testified before the Senate Committee on Homeland Security and Government Affairs earlier this month.
“The combination of weak economic conditions and diversion to electronic forms of communications continues to result in significant declines in the use of First-Class Mail and weakness in the use of Standard Mail,” said statement by the postal service on Donahoe’s testimony. “Future mail volume projections show this trend continuing, requiring even greater efforts to reduce costs.”
Millionaire Corner research shows than increasing numbers of Americans are using computers and mobile devices to communicate and conduct business. Almost half of Millionaires surveyed in June say they own smartphones and use them for diverse purposes, including texting, sending e-mails, trading investments and paying bills. More than one-third of young Millionaires own tablets, which they use to track sporting events, play games, follow the news, research investments, pay bills and conduct other financial business. Nearly 90 percent of Millionaires use personal computers to pay bills, while 61 percent trade over their computers and 93 percent use computers to monitor their financial accounts.
The postal service is the only delivery service that reaches every address in the nation, including 150 million homes, business and post office boxes. The agency relies on the sale of postage, products and services to fund its operations, which include 32,000 offices. The agency has an annual revenue of more than $67 billion and delivers nearly 40 percent of the world’s mail.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.