U.S. Postage Increasing

U.S. Postage Increasing
So much for the non-existent inflation rate that the government keeps trying to convince us does not exist. The price to mail a first-class letter is going to jump to 49 cents. This a three cent increase over the current rate. Postcards rates will rise to 34 cents. This is “supposed” to be s “temporary” rate increase that is going into effect on January 26, 2014.

The 3 cent increase in postage rates is the highest jump since June 20, 2002 when stamp rates increased from 34 cent to 37 cents. The emergency rate increase was filed in September of 2013 to the postal governors. They could be quoted as the rate increase was a “last resort” due to the failure of Congress to address the Post Office’s financial woes.

The Postal Regulatory Commission endorsed the six percent increase by a two-to-one vote on Christmas Eve, Dec 24 2013. The Commission declared the emergency portion of the postage increase would be a temporary “surcharge” that could disappear in two years. Note the word “could” disappear.

This postage increase is sure to spur a massive drive to purchase forever stamps at the current 46 cent rate. No doubt this is going to help the cash-strapped Post Office in the short-run. However it seems that Postal Officials were quite disappointed that the increase would not be a permanent one. It is the Postal Commission’s opinion that this increase should give the Post Office 2.8 Billion dollars in funds it currently does not have.

This windfall of profits is supposed to make up for the loss of 25.3 billion pieces of mail that the Post Office estimates that it has lost in business from the years 2008 to 2011 as a result of the current ongoing recession. As mentioned, Postal Officials are disappointed that the Postal Commission is not making the rate increase more permanent.

Postal Officials are considering court appeals on this portion of the Postal Commission’s decision. One spokesman for a trade group said that the new increase is going to increase prices an average of 0.9 cents per standard advertising mail piece and 1.1 cents per piece for periodicals.

There is definitely disagreement between Postal Officials and the Postal Commission on rate increases. Postal Officials are predicting more future losses in the years to come. This rate increase is also likely to spur Congress to avoid tacking the Post Office deficit mess.

Given the advances in technology, the Internet, online payments, etc. the outlook for the Post Office is bleak. The only way the Post Office is going to stay in business is to have the taxpayer pick up the tab.

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