Monday, August 9, 2010

Post Office spiraling to its death

Another stamp price increase is in the offing...

The post office will be toast in the next decade-- or will continue to need increasingly larger subsidies-- going forward...

Here's the story from the AP...

Fighting to survive a deepening financial crisis, the U.S. Postal Service said Tuesday it wants to increase the price of first-class stamps by 2 cents -- to 46 cents -- starting in January. Other postage costs would rise as well.

The agency's persisting problem: ever-declining mail volume as people and businesses shift to the Internet and the declining economy reduces advertising mail.

Yep, higher prices will surely stem the tide of people seeking substitutes!

The post office lost $3.8 billion last year, despite cutting 40,000 full-time positions and making other reductions, and Kearney said it is facing a $7 billion loss for this year and the same for fiscal 2011, which begins in October. The rate increase would bring in $2.5 billion...

Really? Is that based on the usual static analysis of changes in tax rates, prices, etc.?


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