spending

A Primer on the Postal Service Retiree Health Benefits Fund

The pay-as-you-go approach can look attractive in the short run because it temporarily hides costs. However, it often leads to future financial problems. In extreme cases like Detroit and Puerto Rico, it can contribute to bankruptcy or its equivalent. At the Postal Service, the debts accumulated during decades of pay-as-you-go financing may be partially responsible for reduced service quality today; they threaten future mail users with rate increases; and they heighten the danger the Service will need a taxpayer bailout.

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