Economist: Obama’s Green Loans Are Losing Taxpayers Money
excerpt:
The Obama administration’s controversial green loans program has raked in $810 million in interest repayments, earning praise from left-wing pundits and environmentalists who argued the program is on track to make money for taxpayers.
A closer look at a recent Department of Energy financial report, however, suggests liberals may be sounding the trumpet a little too soon. One prominent economist notes that, if you include government borrowing costs to finance the loans, it puts “taxpayer losses in the hundreds of millions of dollars.”
According to the Energy Department, it is on track to earn more than $5 billion in total interest payments. Already, the DOE says it’s raked in $810 million in interest payments, which now outweigh the $780 million in estimated losses the loan program is expected to incur.
Sounds good, but a tiny footnote in the DOE’s report casts some doubt on the overall profitability of the green loan program, which has so far funneled more than $30 billion to finance renewable energy and alternative vehicle projects.
The DOE did not factor in borrowing costs incurred by the Department of Treasury in financing the green loans. This means taxpayers are likely seeing a loss on government-backed green loans, according to Urban Institute economist Donald Marron.
“In other words, DOE reports gross interest received, not the net interest taxpayers have earned after subtracting Treasury borrowing costs,” writes Marron, who previously served on the President’s Council of Economic Advisers. “But when we account for Treasury borrowing costs, taxpayers are actually well behind.”
” One prominent economist notes that, if you include government borrowing costs to finance the loans, it puts “taxpayer losses in the hundreds of millions of dollars....”Sounds good, but a tiny footnote in the DOE’s report casts some doubt on the overall profitability of the green loan program, which has so far funneled more than $30 billion to finance renewable energy and alternative vehicle projects.
The DOE did not factor in borrowing costs incurred by the Department of Treasury in financing the green loans.”
This is potentially a legitimate argument. Though looking at this actual DOE page on it I cannot confirm or deny the allegations.
http://energy.gov/articles/energy-department-s-loan-portfolio-continues-strong-performance-while-deploying-innovation
More importantly it brings up a topic far more important than the alt. energy loans. The Treasury Department should NEVER have to pay borrowing costs. It prints money. Only the evil implementation of the FED allows for such nonsense bankster stealing from Americans.