Social Security, Postal Service Bleeding Cash
While most of us have had no problem letting go of writing and mailing an actual letter since the advent of email, we really can't control getting old. That's going to happen, and chances are when we do get old, we'll want to write letters to the editor. The way things are going, however, we may not have someone to deliver that letter nor the money to buy a pen.
On the same day that the Social Security Administration reported in their annual trustees report that they are in the red for the first time since 1983, when the system was overhauled, the U.S. Postal Service also reported that they are in the red as well.
For Social Security, it means they will pay out more this year than they will collect. Simple accounting. There is some light at the end of the tunnel however, as the deficit will only last through next year, providing the economy makes a mostly full turnaround. Following that, it will go back into the red in 2015, then spend the next two decades pulling money from the program's trust fund.
Social Security is going to need another overhaul before 2015 rolls around, especially if the next generation of older folks is going to want a piece of it. With so many undocumented workers not paying into the system (but certainly going to be asking for a piece of it), a serious strain will be placed on these types of government programs.
Meanwhile, the United States Postal service is reporting a whopping $3.5 billion quarterly loss.
"Given current trends, we will not be able to pay all 2011 obligations," said Joseph Corbett, the agency's chief financial officer.
The connection to Social Security here is the Postal Service will be spending $5.5 billion next year on pre-funding retiree benefits. That's a lot of money that will be cutting directly into the service that delivers your junk mail. In order to better fit into the world in which it exists, the Postal Service is going to have to adapt to it.
We all pay our bills online, we send email and we use FedEx and UPS to deliver packages. The Postal Service is a secondary afterthought. The answers are out there for them: end Saturday delivery service, maybe stop delivering crappy junk mail... Either way, they better figure it out soon before they are completely obsolete.