PAWLEYS ISLAND, S.C. We read about the demise of the Seattle Post-Intelligencer in a real newspaper, The New York Times, which we bought at the local CVS. Our purchase cost $1.50 and about 15 minutes. We could have read the identical story online for no cost in about 30 seconds. And there, in a nutshell, is why the Post-Intelligencer closed its print edition and newspapers across the country are in deep trouble.

Free is not a business model. And the information contained in that one issue of the Times cost a small fortune to produce. The story from Seattle was co-written by the paper's regional correspondent and its media writer back in New York. Other front-page stories that day were datelined Guangzhou, China; Islamabad, Pakistan; Tempe, Ariz.; and Washington, D.C. Inside, staff-written accounts came from Los Angeles, Calif.; Philadelphia, Pa.; Kandahar, Afghanistan; and the Djabal Refugee Camp in Chad.

This is all information we, as informed voters, need to know in a thriving democracy. The huge and unanswered question is: Who will pay for it?

The good news is that information is not an obsolete commodity. In fact, it is more valuable than ever. In its annual report, the Project for Excellence in Journalism says that traffic on the top-50 news Web sites increased by 27 percent last year. The four leading sites Yahoo, MSNBC, CNN and AOL grew 22 percent and attracted 23.6 million unique visitors a month.

Clearly, professional journalists are still producing a product that consumers want. But the business model, the delivery system for bringing their work to their customers, has been decimated by technology. Gee, $1.50 and 15 minutes? Or free in 30 seconds? Not much of a choice.

"The problem facing American journalism is not fundamentally an audience problem or a credibility problem," said the Project for Excellence. "It is a revenue problem the decoupling of advertising from news."

Electronic media outlets are also facing severe shortfalls, but the numbers about newspapers in the project's report are particularly dismal:

The closing of the Post-Intelligencer follows the recent death of the Rocky Mountain News in Denver, Colo. The Tribune Company, which owns the Chicago Tribune, the Baltimore Sun and the Los Angeles Times, filed for bankruptcy in December. Newspaper stocks fell 83 percent in 2008.

Circulation for daily papers fell 4.6 percent last year and is down 13.5 percent since 2001. Total advertising revenue plunged 16 percent, and online advertising dollars, "once the great hope" of the industry, actually declined slightly. The reason: Competition is driving down ad rates while portals like Google are gobbling up a growing share of Web-generated revenue.

About 5,000 full-time newspaper jobs were slashed in 2008, and by year's end, newsrooms will be down by one-quarter from 2001. The Post-Intelligencer employed 165 news staffers; its surviving Web site will have 20.

All this gloom comes at a time when new sources of information bloggers, citizen journalists, Twitterers are booming. But as the Project for Excellence notes, these sources "remain far from a substitute for legacy media." They cannot begin to produce the quantity or the quality of information generated by traditional outlets. In fact, most bloggers depend on the "legacy media" to provide the basic news they then review and recycle.

Why does this cost crunch matter? One example: News organizations are rapidly closing overseas bureaus just when foreign stories are impacting more Americans than ever. China holds $1 trillion in American debt. Pollution, disease, immigrants, goods, capital they all flow easily across borders. But the number of reporters assigned to cover those stories is shrinking.

Or take investigative reporting, an absolutely necessary element in holding powerful forces accountable. Uncovering Wall Street's convoluted contribution to the economic downturn is extremely expensive and time-consuming. Only dogged journalists revealed the Bush administration's clandestine and illegal schemes for eavesdropping on terror suspects.

Information is not just another commodity, like cars or corn; it is vital to our system of government. If banks or insurance companies are too important to fail, then so are newspapers.

Smart people are already looking for new business models: "micro payments" that consumers make each time they read an article; philanthropic funding for investigative units; voluntary subscriptions based on the success of National Public Radio; built-in, regular payments similar to the cable-TV model.

We'll still pay $1.50 for a newspaper, but we know it's a dinosaur. New revenue streams supporting the information business must be found, and they will. The health of democracy depends on it.

Cokie Roberts' latest book is "Ladies of Liberty: The Women Who Shaped Our Nation" (William Morrow, 2008). Steve and Cokie Roberts can be reached at stevecokie@gmail.com.