The USPS has been teetering on the brink of bankruptcy. A key reason was a 2006 law that required the postal service to make annual payments of about $5.5 billion for 10 years to pay for future retiree health benefits.  …

In the three months that ended June 30, the agency reported net losses of $5.2 billion.

via CNN.

People like to point out why the post office is suffering a slow cancerous death.  eMail, electronic bill pay, faxes, etc.  But that’s all garbage.  The U.S.P.S. is dying because it failed to meet the realities of the marketplace and because it overpays it’s workers,  a/k/a  bad management.

Compare the USPS which LOST $5.2 billion in the 2Q 2012 to UPS which made $1.12 billion in the same period.  Or FedEx which made $459 million in the 3 months ending 08/12.

Years ago I read Jim Rogers‘ book Investment Biker.  In it he tells the story of being in the USSR and mailing some packages back to the UK.  Long story short, the communist government charged less to mail letters and package than it cost.  This was because it was popular with the people.  The people wanted to be able to send letters cheaply and the government obliged.  But it was but one example of several (cited in the book) showing how and why the USSR would fail.  A government cannot continue to offer services for less than what they cost.

No entity can continue to offer services for less than their cost.  The USPS is not exception.  It must either figure out how to charge enough for the service it provides or get out of the business.  But right now the taxpayers are on the hook to massive amounts of USPS debt.  That’s not right.

Lastly, you should care… greatly.  The government is now just starting to take over the nations health care.  It too will be run with the same level of efficiency and forward thinking as the USPS, or maybe the State of Illinois DMV.

Health care in this country will follow the USPS in bankruptcy.  And that’s not going to be good for anyone.