3 ms·
First off: Unlike a bank or lending institution, the government can easily make up profits elsewhere. It's probably more like a grocery store-lose money on one
by batbomb 12y ago
First off: Unlike a bank or lending institution, the government can easily make up profits elsewhere. It's probably more like a grocery store-lose money on one thing to get people in the door, make that money back somewhere else. Sure, there are people that will come in, buy the one thing on sale, and leave (solyndra), but you care about the average, not the outlier.
So, the economic impact that may have increased tax revenue for the government and overall strengthened the economy in addition to loan and interest receipts. While that's hard to calculate, at least one small point may be representative: Tesla replaced Oracle the NASDAQ 100 in 2013, making up almost .7% of the gains the NASDAQ 100 has had in the last 18 months. Would that have been possible without a DOE loan? Maybe, maybe not. Still, it's clear people are and will be profiting (both short and long term) off of Tesla's rise, paying in money to the government when that happens.
But really, does it matter? We are talking about a government program that was successful within a margin of error.
The goal of the programs wasn't to turn a profit, and although it wouldn't be politically expedient to say, I'm sure they assumed a high likelihood of loss on the loan program. The goal however, was to spur growth in clean energy industries without assuming too much financial risk by the government (i.e. by just giving away hand-outs).
The mere fact that the loans have been paid back does signify that those goals were likely met, as failing companies don't have much incentive to pay back loans, and successful companies (arguably) pay taxes
The reality that the news loves a whipping boy and incompetence in government and institutions. Solyndra was a gift in that regard. It's also evident that it was also a statistical outlier, but anecdotes will always reign supreme over statistics when it comes to the news.