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Joe Biden is in Michigan today, reportedly to announce the first round of $2B in battery grants.  (Source: The Weekly Standard)
Grants bring good news to state's troubled economy

Michigan is among the states that has been hit hardest by the recession.  The government went to extreme measures to keep the state's economy from collapsing, including assuming majority ownership of GM and propping up Chrysler through bankruptcy.  Now the federal government is preparing to reach deeper into its pockets to help the state out even more.

Vice President Joe Biden is in Michigan today at the NextEnergy Center in Detroit.  He is reportedly going to announce the first round of $2B USD in Department of Energy battery grants.  The grants should boost the state's economy and help develop better electric vehicles, currently favored as the future of the car industry by the domestic automakers.

The federal government is also separately loaning money to battery manufacturers under the $25 billion Advanced Technology Vehicle Manufacturing Incentive Program (ATVM).  Among the battery manufacturers that applied for that loan are A123 Systems, EnerDel, and Compact Power.  Thus far Ford, Nissan, and Tesla Motors received ATVM loans.  It is unknown who the grants will go to, but A123 Systems, EnerDel, and Compact Power seem like leading candidates.

Ed DeSeve, the president's special advisor on the stimulus program, had stated about on July 21, "I think you'll see over the next week or so ... some industrialization focus, for example, on the battery grants that are coming.  It makes sense to put those in places where there is productive working capacity -- people who can do the jobs. There are plants where the jobs can exist, and I think you are going to start to see more and more of that over time."

The ATVM loans must be repaid eventually by automakers and battery makers.  However, the DoE grants do not have to be repaid.  Michigan has also offered battery makers some big tax cuts in hopes of luring business into the state.

A limited amount of tickets to Mr. Biden's appearance have been offered to the public on a first-come-first-serve basis.



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RE: Good
By Xavier434 on 8/5/2009 12:56:26 PM , Rating: 2
Money is money, but the purpose and conditions behind which the money is being spent makes all the difference in the world. Case in point, no one is completely against all forms of government spending. Everyone takes their sides based on how much is spent, why it is spent, and how it was acquired.

Therefore, the difference between a bailout and a grant lies within each of their purposes. Grants are not designed to prop up a company although they do have the potential to create that effect. The purpose is to target a specific service, product, or an idea. Unlike bailouts, they are not intended to target a specific company or small set of companies although due to the nature of some markets that result is sometimes inevitable. Grants are also available to anyone provided that they meet the requirements which are designed to ensure that the money will be spent to fulfill its purpose and nothing else. Bailouts are designed to do the same, but careless design lacking regulation such as the bank bailouts designed by the Bush Admin will result in the money being spent in ways that are not intended.

Often times, grant money is permitted because even though the demand is there for a particular product or service such as this battery technology, no business is capable or willing to step up to bat and take the necessary risks to get the job done in a timely fashion. That doesn't mean that the demand does not exist though. For example, there is plenty of demand for a cure for cancer but we provide grants all of the time to hasten the progress now don't we? It also doesn't mean that it is money which isn't well spent. Many wonderful things have come to us which were supported in part by grant money....and yes, there are other things which didn't work out so great.

On the other hand, a corporate bailout's single purpose is to prop up a company which is not capable of sustaining itself in order to keep it from going out of business. Such things are supposed to happen under the pretense that the people will be a lot worse off overall if the bailout doesn't occur.

Now, whether or not you support either of them is up to you. All I ask is that you do not label something as anything other than what it actually is just because you don't like it and you want others to view it negatively as well by using a word that happens to be very unpopular at the time. If you don't like bailouts then say that you don't like bailouts. If you don't like grants then say that you don't like grants. If you don't like both then say you don't like both.


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