6NOV: The Apocolypse Cometh
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October 6th, 2012, 04:54
I hate how even when we have clear factual examples of mistakes with definite numbers attached to them that a politician could cite against their opponent, they still can't even do that honestly. Solyndra was a mistake and a pretty stupid one - as I imagine the other 2 bankrupt companies who received loans under these programs may also prove to be. Those failures are pretty damning without having to conflate the ammount spent on loan gaurantees to companies such as solyndra with the total for the far broader energy spending section of the stimulus. Nor is it nescessary to misrepresent loan guarantees as tax breaks.
Of the 90 billion in energy spending erroneously referred to as tax breaks for green energy and alternatively to money for green jobs, it actually broke down as follows:
$29 billion for energy efficiency, including $5 billion for the weatherization of
$10 billion to modernize the nation’s electric grid;
$6 billion for domestic manufacturing of advanced batteries and other components
of alternative vehicles and fuel technology;
$18 billion for transit projects, including high-speed rail;
$3 billion for researching and developing clean-coal technology;
$3 billion for job training;
$2 billion in manufacturing tax credits.
$26 billion in loan guarantees securing private loans
The loan guarantees (this is co-signing a loan not a direct loan from the government) were granted to 28 companies if we include loans approved from all 3 loan programs by the Obama administration. Of those 26 companies, 3 have failed - Solyndra, Beacon, and Abound Solar; the total loans they actually took out under government backing totalled $648 million. That is a loss of 4% of the total loans backed and an 11% failure rate for companies receiving backing.
It is important to understand that this $648 million is also the total cost incurred thusfar by the loan program. These are gaurantees of private loans, not direct expenditures. Therefore this does not equate to 26 billion that could have been spent elsewhere - but rather a total stake of $26 for which at least some of it could have been risked far more wisely. The default rate is not anywhere near 50%, the ammount spent in this way is not nearly half of the $90 billion energy program with which the loans were conflated, the total was not spent on "green jobs," nor is much of this cost in the form of tax breaks.
The wisdom in choosing how to spread this risk and best use those gaurantees is certainly questionable. I disagree with many of the loans made particularly since the total number of permanent jobs created by some of them are extremely small and the construction jobs are fewer than what supporting many smaller loans could have produced. Additionally I would expect the bankruptcy rate to climb as some of the remaining projects face similar challenges as Solyndra had - that they are manufacturing a commodity item without the benefit of near-slave labor enjoyed by some overseas manufacturers. The honest and accurate criticisms that could have been made in this matter are more complicated and sound less impressive than the ones made with conflated or outright dishonest figures.
I've got an example of one of these arguments for Obama from the debate; that is an example where an honest criticism could have been argued but a sensationalized and fundamentally dishonest one was used. I'll throw that one in after I have some coffee.
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