The Motley Monk can hear it now on MSNBC: "Obamanomics works! Plus: "DOE earned $810M in interest while losing $780M on the loans." And: "Horray! Central planning is fulfilling the dreams of hope and change."
So, let's break out the Dom Perignon! After all, those $$$s would represent a tidy $30M profit. Not quite enough to pay off the nation's $18T debt; but, heck, it's a move in the right direction.
However, if one "does the math"--as analysts at the Urban Institute have--the bottom line is that DOE ignored to include in their report the borrowing costs of the money. Why? To demonstrate the success of those critical investments.
Due to the "fuzzy math" DOE used, two problems with the report emerge:
- The $810M in interest didn't account for UST's borrowing costs.
- UST originally borrowed money (with interest) to make those loans to the energy companies at extremely low interest rates. Factoring into the equation those borrowing costs, losses to UST are in the hundreds of millions of $$$s. That's not quite the tidy $30M profit published by DOE.
- The loan program has projected that it will receive $5B in interest payments.
- That $5B isn't profit, only interest payments. DOE seems to have forgotten to account for the borrowing costs as well as possible (probable?) defaults on the loans made. Remember Solyndra and be prepared for Ivanpah.
The unfortunate truth is not that the President is wrong-headed when it comes to how to make green energy work (goverment is less efficient than the free market).
The unfortunate truth is not that the government apparatus is using fuzzy math to prop up the President's signature issues (the same thing is continues to happen with Obamacare enrollment numbers).
No, the unfortunate truth is that apparatchiks in the federal government are purposely "cooking the books" in a deliberate effort to prop up the President by deceiving the people who are paying their salaries.
That's not "public service" but a deathknell for "government of, by, and for the people."
Let the discussion begin...
To read the Urban Institute report, click on the following link:
"Spin Alert: DOE loans are losing money, not making profits."