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Fisker Karma
This is the same program that funded Fisker Automotive

South Dakota's Republican senator wants to terminate the federal loan program that gave millions of dollars to Fisker Automotive -- an automaker that has failed to produce a car in over a year and is now missing loan payments to the U.S. Department of Energy (DOE). 

According to The Detroit News, Sen. John Thune (R-S.D.) wants to get rid of the $25 billion Advanced Technology Vehicle Manufacturing loan program due to failures like Fisker Automotive wasting taxpayer money. He has already proposed an amendment that would “permanently end the ATVM program and save taxpayers from paying for more of President Obama’s bad green-energy bets.”

Thune's amendment comes after the DOE said it would auction off Fisker Automotive's $168 million unpaid loan earlier this week. DOE plans to launch the auction in early October. 

Fisker Automotive is an auto startup that received $529 million in DOE loans back in April 2010. However, Fisker fell a little behind on its production schedule, and in May 2011, DOE froze the loans due to "unmet milestones." Fisker had only drawn $193 million of it at that point. It hasn't been able to build a car since July 2012, and started looking for a buyer so it doesn't have to claim bankruptcy.

But Fisker isn't the only auto company that failed after receiving money from the Advanced Technology Vehicle Manufacturing loan program. Vehicle Production Group LLC -- which is a Michigan-based startup building wheelchair-accessible compressed natural gas vehicles -- was awarded $50 million in loans back in March 2011, but has since halted production.

Senator John Thune

DOE sold its unpaid $50 million loan for Vehicle Production Group LLC to AM General for $3 million earlier this month. According to The Detroit News, taxpayers lost about $42 million on that sale.

The Advanced Technology Vehicle Manufacturing Program was created by Congress in 2007 in an effort to reach the goal of 1 million EVs on U.S. roads by 2015, but the program hasn't made a new loan since March 2011. This is mainly due to the fact that two of the five companies (Fisker and Vehicle Production Group) that received government loans stopped production. 

The Obama administration received a lot of flak for these failures, but the program wasn't all bad. The other three loans -- $5.9 billion to Ford, $1.4 billion to Nissan and $465 million to EV startup Tesla Motors -- proved to be successful. Tesla even managed to pay its full sum back nine years early, which was a great feat for a startup. 

U.S. Energy Secretary Ernest Moniz said last month that the Obama administration is interested in reviving the $25 billion Advanced Technology Vehicle Manufacturing Program. He noted that it plans to draw a new round of loan requests (but is not actively considering any applications for retooling loans) and reexamine its lending criteria in order to avoid problems it encountered in the past. 

Source: The Detroit News

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RE: Bad Loans
By EricMartello on 9/21/2013 12:04:28 AM , Rating: 2

Farmers would farm to meet demand for the area they serve. They would not expend more resources to farm crops they they would not be able to sell at a profit.

Which infers that there would never be an oversupply.

Not if the area they serve is expanded to include demand from some or most of the country, which was coming off the "roaring 20s" stock market bubble.

Subsidies were enacted in a time when the price of certain crops - particularly corn - was cheaper than the cost to grow it.

Which infers an oversupply, which according to the above can not happen, because farmers are thr masters of the free market and will account for ever market factor that affects the price of their goods.

Being a good farmer does not automatically make you a good businessman. When you know what you're talking about you won't need to hope that suggested 'inferences' actually exist. In your case, they don't.

The point of the subsidies is to keep the cost of goods stable. Nothing more and nothing less. Too much production buts farmers out of business, to little leads to price spikes. Neither is good for the economy.

Or in other words: The net cost of the farm subsidies is less then the long term effect of getting rid of them.

Many goods are produced without subsidies and are not subject to wild price swings. Subsidies were introduced at a time when poverty was sweeping the nation due to the great depression - people were too poor to buy farm goods, among other things, and it could be thought of as the "too big too fail" bullsh1t of its if people would not resume farming when the economic downturn recovered.

Sorry but there really is no good reason for the government to step in and redistribute wealth on its whims. Subsidies were a "maybe" in their time. They are a "hell no" today and have been for more than half a century.

"When an individual makes a copy of a song for himself, I suppose we can say he stole a song." -- Sony BMG attorney Jennifer Pariser

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