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They are theoretical money that might become real money in the future. They don't cost the government anything unless a power plant fails and defaults on it's

by phire 4y ago

They are theoretical money that might become real money in the future. They don't cost the government anything unless a power plant fails and defaults on it's loans. And even the it's not the full $40 billion. Just the shortfall between what the bank can recover and the cost of the loan. And if the project got anywhere near completely, there should still be a nuclear power plant. Given that one of the bigger risks to nuclear power plans are changing government regulations, it's actually a pretty low risk loan guarantee for the government to make. There is a decent chance they will never have to activate the guarantee. > Or, how would you like to provide me loan guarantees? They won't cost you anything. Right? I mean... What are you taking a loan out on? how does it benefit me? What are the risks of you defaulting? Why is my risk assessment different from the bank? In the case of a default, what is the shortfall likely to be? With the right answers to those questions, it might be in my interests to guarantee a loan for you.

cycomanic 4y ago
> They are theoretical money that might become real money in the future. > They don't cost the government anything unless a power plant fails and defaults on it's loans. And even the it's not the full $40 billion. Just the shortfall between what the bank can recover and the cost of the loan. I can't believe we are having this discussion on HN. Are you seriously implying loan guarantees are free? > And if the project got anywhere near completely, there should still be a nuclear power plant. Except that is not guaranteed. Historically speaking nuclear power plants have been going massively over budget. So the one thing that seems guaranteed is that the government has to guarantee even more loans. > Given that one of the bigger risks to nuclear power plans are changing government regulations, it's actually a pretty low risk loan guarantee for the government to make. Point me to any case where changing government regulations were a significant risk for nuclear power plants. The main risk is that the build goes massively over budget (like what is happening with pretty much every build in recent history), which will make it much more difficult to recover the cost. >There is a decent chance they will never have to activate the guarantee., So if that is the case why do they need it? Private investors should be all over it. The reality is, the risk is high for questionable return. That is why they need the government to step in.

by phire 4y ago

cycomanic 4y ago

> They are theoretical money that might become real money in the future. > They don't cost the government anything unless a power plant fails and defaults on it's loans. And even the it's not the full $40 billion. Just the shortfall between what the bank can recover and the cost of the loan. I can't believe we are having this discussion on HN. Are you seriously implying loan guarantees are free? > And if the project got anywhere near completely, there should still be a nuclear power plant. Except that is not guaranteed. Historically speaking nuclear power plants have been going massively over budget. So the one thing that seems guaranteed is that the government has to guarantee even more loans. > Given that one of the bigger risks to nuclear power plans are changing government regulations, it's actually a pretty low risk loan guarantee for the government to make. Point me to any case where changing government regulations were a significant risk for nuclear power plants. The main risk is that the build goes massively over budget (like what is happening with pretty much every build in recent history), which will make it much more difficult to recover the cost. >There is a decent chance they will never have to activate the guarantee., So if that is the case why do they need it? Private investors should be all over it. The reality is, the risk is high for questionable return. That is why they need the government to step in.