Posted on 06/21/2002 1:37:10 PM PDT by vannrox
By Leslie Wayne
New York
June 19 2002
Two years ago, amid waving flags and swaying hula dancers, the United States Government announced an ambitious program to build two passenger cruise ships - the first in a US shipyard since the 1950s and provided more than $US1 billion ($A1.79 billion) in loan guarantees to get the program going.
It did not hurt that the ships were to be built in the Mississippi shipyard where the father of Trent Lott, the Republican Senate minority leader, once worked. As a result, Senator Lott became one of the strongest supporters of the program, named Project America.
Today, the project is being derided as an example of political porkbarrelling gone wrong. What remains of Project America is an unfinished hull the size of two football fields and pieces for a second ship lying around.
The hull is not floatable. It has neither a completed bow nor a stern and its future is in doubt. The price to the government for the failed project is $US187 million money the government is trying to recoup by putting the halffinished hull on the market. But who wants to buy a half-finished cruise ship?
This dismal reality confirms the worst fears of the project's critics and is a far cry from the high hopes of those who backed it. Critics, who call Project America corporate welfare, say it shows the dangers lurking behind the tens of billions in loan guarantees the government has extended to an array of businesses, including airlines, the housing industry and American exporters.
"This has turned into a corporate welfare debacle," said Stephen Moore, senior fellow at the Cato Institute, a Washington research group that promotes freemarket economics.
"Congress likes loan guarantees because they do not show up on the budget and appear to be free to taxpayers. Yet there are so many instances, like this one, where the project explodes into the taxpayers' lap."
For Project America's congressional backers, Senator Lott among them, the ships were a way to jumpstart the dormant commercial shipbuilding industry.
In the critic's corner is Republican Senator John McCain, who put Project America on his annual "pork" list.
The project's failure is being investigated by the Department of Transportation Inspector General's office and the General Accounting Office.
- New York Times
This story was found at: http://www.theage.com.au/articles/2002/06/18/1023864427578.html
Ahhh, as opposed to all those time when political porkbarrelling went right.
Wonder how on earth they expected to pay the debt service on the loans by offering cruises.
This does not seem like a very profitable business in the 2000s.
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