The Federal Times says that the US Postal Service is likely to default on the next $5.5 billion PAEA payment due on August 1:
While a default would be embarrassing for the Postal Service, the practical consequences, if any, are unclear. “We will continue to pay employees and suppliers to keep the mail moving,” Partenheimer said. Benefits to current retirees would not be affected.
The fact is, of course, that the consequences of the paper “default” are crystal clear: there really aren’t any, at least in the real world.
The “default”, like last year’s debt ceiling “crisis”, is a totally contrived bit of theater created by politicians to serve their own purposes. What might be slightly entertaining about the upcoming “default” is that, having cried wolf so many times (remember Issa and Carper’s dueling “countdown clocks”?), members of both parties might be a bit embarrassed when the dreaded “default” comes and goes with no noticeable effect. Then again, probably not- embarrassment requires a sense of shame- something our current crop of politicians obviously lacks.
For an extended discussion of what’s behind all the political theatrics (Hint: it has nothing to do with saving the postal service!), see Alan Robinson’s latest post.