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That's right Mr. President, keep loaning the money, everything is going GREAT!  (Source: Getty Images)
President says high-risk loan was "felt like... a good bet"

(This article contains editorial commentary, which is the opinion of the author.)

President Barack Obama has endured scathing criticism in recent weeks for loaning $535M USD to failed solar startup Solyndra.  The loan came as part of a $40B USD "green" technology stimulus effort.  But on September 1, 2011 Solyndra filed Chapter 11 bankruptcy, leaving its 1,000+ employees looking for work and leaving the government staring at an un-recoupable loss.

I. Interview: Obama says "No" regrets on wasting $500M USD

In recent weeks Republicans have lashed out at President Obama for the lost money.  They argue it's indicative of the President's overall budget incompetence.  They've launched a probe into the loan and the Department of Energy's overall loan infrastructure.  States Rep. Michael Burgess (R-Texas), a member of the House Energy panel’s investigative subcommittee, "We need to hear from Secretary Chu and [White House Office of Management and Budget Director Jack] Lew to fill in some of the blanks.  The buck has to stop someplace, and presumably it stops with the heads of those agencies."

But the POTUS is holding his ground.  In an interview on ABC News' "Good Morning America", also broadcast online on Yahoo! News Monday, anchor George Stephanopoulos asked President Obama if he regretted the 2009 loan guarantees .  He replies, "No I don't.  Because if you look at the overall portfolio of loan guarantees that had been provided, overall it’s doing well. And what we always understood is that not every single business is going to succeed in clean energy."

President Obama's administration is accused of rushing the loan guarantee in order to allow it to be announced at the September 2009 groundbreaking of the company's new factory.  By February the loan was already under investigation.  Still, the President stood firmly behind Solyndra, visiting their California headquarters in early 2010 and touting them as a green energy "leader".

Some emails that have been released indicate some administration members had expressed concerns about the company's financial health -- concerns that were ultimately overruled.

Obama implied America has to get more China-like when it comes to loans, in order to compete with the Asian rival.  He states. "If we want to compete with China, which is pouring hundreds of billions of dollars in this space, if we want to compete with other countries that are heavily subsidizing industries of the future, we have got to make sure that our guys, here in the United States of America, at least have a shot."

II. Editorial: Business as Usual in Washington, D.C.

To be fair, as bad as the Solyndra loss looks, the previous Bush administration spent many times that essentially paying off the losses of the American International Group (AIG), which it built up from taking on risky investments pre-recession.  AIG received over $127B USD [source] and sent over $100B USD overseas to banks it owed money to.

Thus perhaps the Solyndra debacle is more of a testament to how things are run in Washington no matter which party is in charge, rather than a sign that President Obama is somehow exceptional or different, for better or worse.  Both parties talk about balancing the budget, but it's a matter of public record that in recent years both parties have overspent, committing to risky investments and troubled assets.

That's not to say what the Obama administration did here was right by conservative fiscal standards.  As the old saying goes, two wrongs don't make a right.  But if there's someone who offers an alternative to this kind of spending they're likely not in Washington, D.C. -- or at least likely not very popular there among either party.

These kinds of wastes are particularly sad, as they come at a time when proud American science projects are being shuttered due of lack of funds.  America recently closed the world's second largest particle accelerator, because the government claimed it couldn't find $100M USD out of the $3.4T USD budget to pay for the accelerator's annual operating costs.  The AIG funding could have paid for over 1,000 years of operation.  The Solyndra funds could have extended the life of the accelerator 5 years.

One thing's for sure when it comes to Solyndra, though -- President Obama isn't going to say sorry for what happened.

Source: ABC News



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This article is over a month old, voting and posting comments is disabled

You all are forgetting one thing
By klstay on 10/4/2011 10:47:23 AM , Rating: 3
The majority of the money flushed down the toilet here came from evil rich people. So, does it really matter what you waste it on as long as they do not get to have it?

According to the IRS (the latest available numbers are from 2008) the top 5 percent of income earners (those with the disgusting, appalling, nearly incomprehensible household AGI of $159,619) paid more income tax than the other 95% accounting for 58.7 percent of collections despite earning 34.7 percent of income.




RE: You all are forgetting one thing
By iwanttobehef on 10/4/2011 11:05:56 AM , Rating: 1
I would love to see your sources on this. I have looked into this in the past and come away with different numbers.

http://www.ctj.org/pdf/taxday2011.pdf

According to this site gathered without much time spent researching the top 5% earn 34.5% of total income and pay 37.1% of total federal income taxes. leaving the bottom 95% to pay 62.9% I am not sure if this is just a case of "liars figuring and figures lying" ie contorting the numbers to say what you want. But in my research the numbers aren't nearly as progressive as you claim they are.


RE: You all are forgetting one thing
By Solandri on 10/4/2011 3:04:17 PM , Rating: 3
Why go to some website with an obvious agenda when the IRS makes the raw numbers available?
http://www.irs.gov/taxstats/indtaxstats/article/0,...

For 2009, there were 140.5 million returns filed. 5% of that would be 7 million. There were 3.9 million returns of $200k or more, or 2.8% of the total.

Total income was $7.63 trillion. Total income of those making $200k or more was $1.96 trillion, or 25.8% of the total.

Total income tax collected was $865.95 billion. Income tax collected making $200k or more was $434.28 billion, or 50.2% of the total.

So the top 2.8% earned 25.8% of total income, and paid 50.2% of total federal income taxes. That is consistent with OP's statement.

Looking at the report you linked to more closely, it looks like they took percentages from all federal + state taxes (i.e. including corporate, property, sales taxes, etc) to dilute the percentage of income tax paid. The fine print also says they attributed the corporate FICA taxes to the employee, which is rather backwards since the whole point of making the company pay them is so that they're hidden from the employee.

Disclaimer: I actually do believe the income inequality in this country has grown to unhealthy levels. But it should be combated with solid, neutral numbers to guide policy. Not by massaged numbers.


By Ringold on 10/4/2011 3:28:05 PM , Rating: 2
I was just about to post the same thing: http://www.irs.gov/taxstats/indtaxstats/article/0,...

One good thing about modern government and the internet: most relevant data is available, and in formats easy to import to whatever data analysis programs one prefers.

No need, like you said, to look to sources with obvious agendas. (Other good sources: FRED and the BLS)

quote:
Disclaimer: I actually do believe the income inequality in this country has grown to unhealthy levels. But it should be combated with solid, neutral numbers to guide policy. Not by massaged numbers.


I agree actually! And it not just about guiding policy with legitimate numbers, but intelligent options. The "Buffet Rule," in practice, sounds like it'll hurt investment, critical in a weak economy. Better ideas: a) raising dividend & capital gains, but dropping corp taxes to zero to compensate b) eliminating all deductions, private and corporate c) anything that broadens the tax base but lowers top-line rates d) huge overhaul, like FairTax plans.

Any of those would be more economically efficient and could raise revenue, but less satisfying to those guys quoting Marx in those Occupy Wall Street marches. Even if we want to soak the rich for even more, there's just far better, but less red-meat, ways to do it.

But, its an election year.

Oh.. wait..


By FITCamaro on 10/4/2011 11:04:45 PM , Rating: 1
Redistributing wealth will do absolutely nothing to make those who make less have more. It will only give them more to waste. Entitlements have grown by leaps and bounds since the 60s and 70s. Has poverty gotten any better as a result? No. The answer is not to encourage people to not provide for themselves by giving them money earned by others, but to encourage them to strive to be like those who earned more.


RE: You all are forgetting one thing
By Jaybus on 10/4/2011 3:23:43 PM , Rating: 3
The "Income,Poverty, and Health Insurance Coverage" report for 2010 is freely available from the US Census Bureau at www.census.gov/prod/2011pubs/p60-239.pdf.

The Tax Foundation has many, but the "Summary of Latest Income Tax Data" at www.taxfoundation.org/news/show/250.html#Data is pertinent. The top 5% earned 34.73% of the AGI and paid 58.72% of the taxes. More telling is that the top 25% earned 67.38% of the AGI and paid 86.34% of the taxes. The bottom 75% earned 32.62% of the AGI and paid 13.66% of the taxes. Clearly, the lowest 75% are already paying less than half of their "fair share", and the top 25% are paying much more than their "fair share". The President's "fat cat" has already been shaken down. It's time to cut spending and stop throwing money away gambling on stock scams.


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