According to a report by the Department of Energy, interest payments to the government from projects funded by the Loan Programs Office were $810 million as of September - higher than the $780 million in losses from loans it sustained from startups including Fisker Automotive, Abound Solar and Solyndra, which went bankrupt after receiving large government loans intended to help them bring their advanced green technologies to market.
The report's findings are more of a political victory than a financial one. It took the program three years to break even after Solyndra's failure, while during that same time the Standard & Poor's 500 index increased 67 percent.
Still, the federal loans program is a success for taxpayers, judging by the numbers in the new report, the DOE said. After Solyndra's 2011 collapse, the program was sharply criticized by Republican lawmakers as a waste of public money and a fountain of cronyism. The outcries mounted as others in the program failed, and the DOE issued no new loans between late 2011 and this year.
This year, DOE began lending money again. They have programs in the works that will support both renewable energy and fossil fuel projects. In February it approved $6.5 billion in loan guarantees to build two nuclear reactors in Georgia, and it issued a conditional $150 million commitment to help build a wind project off the coast of Cape Cod, Massachusetts.
So... we invest money in projects that break even after a 3 year period (and one has to wonder what creative accounting is being applied there), when we could have had a 67% return on that same investment by simply putting it into an index fund. Sounds like the taxpayers got hosed..... and you count that as some sort of great accomplishment??
Lets see if any of those investments actually bare long term fruit that helps the country as a whole, but at this point it's essentially been a waste.
So... we invest money in projects that break even after a 3 year period (and one has to wonder what creative accounting is being applied there), when we could have had a 67% return on that same investment by simply putting it into an index fund. Sounds like the taxpayers got hosed..... and you count that as some sort of great accomplishment??
Lets see if any of those investments actually bare long term fruit that helps the country as a whole, but at this point it's essentially been a waste.
,... interest payments to the government from projects funded by the Loan Programs Office were $810 million as of September,...
higher than the $780 million in losses from loans it sustained
On November 13, NPR reported that the DOE loan program, designed to "accelerate the domestic commercial deployment of innovative and advanced clean energy technologies," is now turning a profit exceeding $30 million after collecting $810 million in interest payments.
The agency also has collected $810 million in interest payments, putting the program $30 million in the black.
Let's do this together.
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So, that is $810 - $780 = $30.
We made $30 in profit. Specifically, $30 million dollars.
Now, I know what you are thinking; Must be some liberal devil magic,....
Don't be scared friend, it's real and legit.
Here are some additional links to back that 30 number you may think I yanked out of thin air;
http://mediamatters.org/blog/2014/11/13/solyndra-scandal-mongering-hasnt-stopped-the-en/201551
http://www.npr.org/2014/11/13/363572151/after-solyndra-loss-u-s-energy-loan-program-turning-a-profit
Now, I would also argue, that we would have made far more, had the Republicans not demanded the program stop loaning out money. But, hey, they wanted to be cautious, since there were failures - makes sense.
By that logic we should invest the entire federal budget in the stock market! WE WILL BE RICH.
The purpose of the program was to facilitate new energy projects. If this article is correct that means we were able to encourage new energy products that weren't able to secure loans otherwise at no cost to the taxpayer.
How can anyone complain about this?
Awww, how cute, someone who has no grasp of finance or accounting trying to interpret numbers.... and failing miserably.
A net gain of $30 million sounds wonderful, until you realize that the taxpayer could have made more than $400 million by throwing the money into a simple index fund. So basically the taxpayer lost at least $400 million in opportunity cost, unless the projects funded with this money bare long term gain, which we don't know yet.
Derp derp. Reductio ad absurdum ring a bell?
At no cost to the taxpayer? No opportunity cost?
Either way, I wasn't the one complaining about it, but OP's conclusion that this is some sort of massive success because of a $30 million gain is simply unsupported and absurd.
Whether the investments are successful or not depends on the long term outcome of the investments. Does it spur some new developments or technology or sector etc etc? If so, then it was money well spent. If not, it was money wasted. We simply don't know that yet.
That seriously doesn't make any sense. The goal of the government isn't to make money, it's to fund alternative energy.
By your logic we should fund the entire government by investing all federal expenditures into the stock market and then use the proceeds to pay things out. Why pay buy a fighter jet? We could have invested that money in the stock market, earned a huge return, then bought a fighter jet. This would of course lead to an unmitigated catastrophe.
Awww, how cute, someone who has no grasp of finance or accounting trying to interpret numbers.... and failing miserably.
A net gain of $30 million sounds wonderful, until you realize that the taxpayer could have made more than $400 million by throwing the money into a simple index fund. So basically the taxpayer lost at least $400 million in opportunity cost, unless the projects funded with this money bare long term gain, which we don't know yet.
Again, reductio ad absurdum. What if, for example, they could have invested that same money into a nuclear research project that brings forth some groundbreaking new energy source opportunity, but didn't? Would you still think this was a good investment? Obviously not. The point is, the government has finite resources to do things, and saying this course of action was good because of a net break even is absurd.
How is it "Reductio ad absurdum" when that's basically what you are suggesting?
Investing in the Stock Market is not something Governments do. Developing Technology and Opportunity is something Governments do regularly. This Fund is well within the Norm.
The mission of the Energy Department is to ensure America’s security and prosperity by addressing its energy, environmental and nuclear challenges through transformative science and technology solutions.
No, it's the only rational assumption you could come to given the evidence.
The argument that because there might possibly have been a better investment for that money somewhere, therefore a government program that was able to develop alternative energy technologies at no cost to the taxpayer was not good is what is actually absurd.
If you applied this standard to private industry it would be virtually impossible to say that any investment *ever* was actually good. There's basically always something better that could be done.
We got new tech and new viable businesses (presumably) and it didn't cost us any money. That's a good day for me.
I am not suggesting that at all.
Sigh. The concept of opportunity cost goes above your head apparently?
I was just providing an easy illustration of that opportunity cost, and how the $30 million is not a meaningful measure of the success or failure of the investment.
Stop it. Just stop. You do not do it for a living.You clearly don't work in the private sector, because this kind of analysis is EXACTLY what is done on a daily basis on all sorts of projects and investments. I should know because I do it for a living.
The difference is that for a private company, you can measure the return of something against a concrete measuring stick, like "the cost of capital" or "my desired ROI" or something like that. For government, the measures are not the same.
You clearly don't work in the private sector, because this kind of analysis is EXACTLY what is done on a daily basis on all sorts of projects and investments. I should know because I do it for a living.
The difference is that for a private company, you can measure the return of something against a concrete measuring stick, like "the cost of capital" or "my desired ROI" or something like that. For government, the measures are not the same.
This is good news. Bring on more solar, wind and nuclear investment.
It's also not their task to fund research and development.You brought up the Index Fund, you indeed suggested it. The only difference was that Eski said the whole Federal Budget. Governments do not Invest in Stocks or Markets, because that is not their task.
Reagan also got rid of energy subsidies for "oil shale liquefaction." ie fracking.Exactly. Imagine if Reagan had never gotten rid of the solar tax break back in the early eighties where we might be now. We had all sorts of Solar industry upstarts in the DC area back then and then they poofed overnight.
It's also not their task to fund research and development.
It's their task to Govern.
Everything else is corruption, waste, socialism, etc.
-John