Posted on 09/07/2013 3:23:24 PM PDT by whitedog57
Paul Krugman has an interesting piece in the New York Times entitled “Years of Tragic Waste.” I thought for a brief second that Krugman was going to mention the reckless waste by the Obama Administration on green energy initiatives like GM’s VOLT, Solyndra or Fisker. Or high speed rail fantasies. But no. Krugman is whining that Congress and the Administration didn’t waste even MORE money!
Take the recent example of VPG.
From AP: The Energy Department conceded Friday that the federal government will lose $42 million on a loan to a shuttered Michigan van manufacturer — part of the same program that provided a $529 million loan to an electric car maker that also has gone under.
Vehicle Production Group (VPG), which made vans for the disabled, ceased operations in February and laid off 100 workers, two years after receiving a $50 million federal loan under the same clean-energy program that provided a $529 million loan to electric car maker Fisker Automotive Inc., according to the Associated Press.
VPG had paid back $5 million of the $50 million federal loan this spring, and the remainder of its debt was sold at auction this week to Humvee manufacturer AM General, which paid $3 million to buy the loan.
In an email to AP, an Energy Department spokesman said sale of the VPG loan was the “best possible recovery for the taxpayer.”
So, to stimulate job growth, the Department of Energy loans $50 million to VPG in 2011. In 2013, VPG paid $5 million back to Uncle Sam and then closed operations. The $45 million dollar note was sold at auction for $3 million. THAT IS A $42 MILLION DOLLAR LOSS FOR 100 WORKERS! Or $420,000.00 per worker!
Assembly of the vehicles will continue to occur at AM General’s 675,000 square-foot Commercial Assembly Plant in Mishawaka, Ind.
This is what scares me abut Krugman, DeLong, Hamilton and other”spend our way to prosperity” types. The moral hazard risk of staggering waste and cronyism act like a vampire sucking scarce resources from the economy and taxpayers. So when Congress debates the government guarantee for residential mortgages, we will see the reckless spending of government rear its ugly head. Again.
Meanwhile Ford is already producing NG powered vehicles on their own.
Insanity
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