Scholarly Peer Reviewed Journal Articles on the United States Debt
The Us Postal Service (USPS) can trace itself back to the American Revolution and Benjamin Franklin, who was even i of two postmasters general before us separate from the British crown. In all that time until the early 1970s, the service broke even each yr, paying salaries, pensions and more than.
The Bang-up Recession of 2008 saw a downturn in acquirement for corporations and regime institutes – even self-funded ones – alike, and the USPS was hit particularly hard. Many companies were already transitioning from physical mail to the internet for business letters, notifications and advertisements, but the recession sped upward that trend. Yet, that's not the merely gene behind the organisation's electric current troubles.
How the USPS Got Into This Position
While there are many factors that led to the USPS' current state of debt, there are 2 primary reasons why that debt has now balloomed. In 2006, the Postal Accountability and Enhancement Human activity (PAEA) ordered the USPS to pre-fund employee retiree health benefits for the next 75 years. While pre-funding other retiree benefits is normal for both private and government organizations, pre-funding health benefits is virtually unheard of. This resulted in an additional expense of around $5.6 billion dollars annually until 2016, with the USPS defaulting on its pre-funding obligations in 2012.
Since the USPS was breaking even at best, requiring such a large lump sum up front placed a huge strain on the service just as the 2008 recession reached its acme and email began to significantly replace conventional letters. Pre-funding prevented the agency from investing in capital projects, inquiry and evolution, or other initiatives to improve the postal service part's finances and logistics even before the recession. Afterwards, the USPS had no pick simply to take on fifty-fifty more debt.
The other main reason is that Congress passed a 2nd law in 2006 preventing the USPS from raising rates on regular mail by more the growth of the Consumer Price Index (CPI). While it was nifty news for people who employ the post office, information technology endangered the organization's ability to enhance money. That's because no thing how much the costs of delivery rise – remember gas prices, wage increases, leases for cargo flights, health insurance for workers and more – the bureau can no longer raise rates to match its expenses, even past a few extra cents.
What Would Happen If There Was No U.S. Mail in America?
If the U.s.a. lost its post, it would bear upon the economy and general lifestyle of Americans across the board. The USPS is the second-largest employer in the United States after Wal-Mart. Nearly one-half a million people would lose their jobs if the USPS went under. Even privatizing it would likely lead to mass layoffs.
Additionally, mail delivery costs would skyrocket for rural customers. Private commitment services, like UPS and Amazon, rely on the USPS delivery network to ship packages to rural locations that are harder — and more expensive — to reach. Without the USPS, private carriers would become even more expensive. This would be particularly challenging for folks who are older or take disabilities. Medications are frequently delivered through the USPS, so people in rural areas could discover themselves unable to beget essential medications.
Government agencies would also suffer from increased commitment costs, which would rise for things like Social Security payments, voter data, census data, jury duty notifications and more. Considering post offices oft provide other federal services, such equally voter registration and passport applications, other government agencies would need to open new locations, such every bit DMVs or local regime offices. That would in turn atomic number 82 to longer look times at those locations.
How the USPS Can Get Out of This Mess
There are several things that could help get the USPS out of the mess. Some actions tin exist taken past U.S. citizens, while other changes are things that Congress and other government leaders must make. Funding — non more loans — is the most obvious thing lawmakers could provide, but there are policy changes that could also help. Assuasive the USPS to diversify the investments information technology uses to pay for pensions, desynchronize its prices from the CPI, shortening its delivery week to Monday through Fri, forgiving its U.S. Treasury debt and more could all put the USPS on a course for long term financial stability.
The steps that ordinary Americans tin can take to save the USPS may seem modest past comparison, but they tin can also prompt activity from lawmakers. There are multiple petitions y'all can sign aimed at Congress and the White House, and you tin can always call or write a alphabetic character to your representative. Past putting pressure on legislators, Congressional gridlock on what to do most the USPS can be ended.
Source: https://www.reference.com/business-finance/us-postal-service-in-debt?utm_content=params%3Ao%3D740005%26ad%3DdirN%26qo%3DserpIndex
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