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Musk only needs half the time given to pay loan

Electric vehicle maker Tesla received a loan from the U.S. Department of Energy to the tune of $465 million. The automaker has until the end of the decade pay off the loan, but CEO Elon Musk believes that Tesla will be able to pay off the entire loan in half the time.

The loan was granted to Tesla under the Advanced Technology Vehicles Manufacturing loan program and allowed the automaker to retool an automotive manufacturing plant in California. Tesla uses that plant to produce the Model S electric vehicle, and has recently stated that it will be able to produce 20,000 of the sedans during 2013.


President Obama and Elon Musk

Despite seeing a significant increase in revenue, the automaker lost nearly $90 million during the last quarter and lost approximately $400 million during all of 2012. This news sent Tesla shares downward last week.
 
Musk also got personally involved in a dustup with the New York Times over what he saw as an unfair and dishonest review of the Model S. According to Musk, the bad publicity cost the company $100 million.

Source: Technology Review


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Great photo
By Samus on 2/28/2013 9:25:57 AM , Rating: 1
Musk such a baller




RE: Great photo
By Reclaimer77 on 2/28/2013 9:45:08 AM , Rating: 2
"Ballers" don't need to beg for money.


RE: Great photo
By Samus on 2/28/2013 10:05:34 AM , Rating: 2
I don't think Elon Musk needs to 'beg' for anything.

He is practically a billionaire with an empire built single-handed originating with the profit of selling Paypal. If government loans weren't available, he'd just have less control of his company in the form of venture capital investment.

Reclaimer we all know your anti government loans, but without them, we'd have nothing. All governments invest in the private sector indirectly. Nobody has the financial power of a government. Not Apple, not Halliburton, not Boeing, not Walmart. Who is going to push the envelope, especially when the economy is frozen up, if governing bodies don't do what is proven to work and increase deficit spending?

If you're such an economic genius, write a book and I will buy and read it.


RE: Great photo
By tanjali on 2/28/2013 10:32:18 AM , Rating: 2
Its not about that!


RE: Great photo
By Reclaimer77 on 2/28/2013 11:14:12 AM , Rating: 2
We would have nothing? Unfathomed stupidity is what that is. Collectivist drivel.

I know I know, "you didn't build that" right Marxist?


RE: Great photo
By Reclaimer77 on 2/28/2013 11:14:13 AM , Rating: 1
We would have nothing? Unfathomed stupidity is what that is. Collectivist drivel.

I know I know, "you didn't build that" right Marxist?


RE: Great photo
By soulcarver on 2/28/2013 11:35:21 AM , Rating: 2
Have you watched that whole speech raw and not cut up? I'm an independent and no fan of Obama, but he was talking in the context of infrastructure investments and government investments in things like ARPANET which gave rise to the internet. The "you didn't build that" quote was him talking about these government investments in public goods that businesses now profit off of. Cherry-picking lines doesn't help your case if you want to sway people like me to your political views. Calling everyone who disagrees with you a Marxist doesn't either.


RE: Great photo
By Dorkyman on 2/28/2013 12:44:34 PM , Rating: 1
At the same time I think it should be blatantly obvious to anyone that Messiah is a collectivist, one who believes in the idea of "from each according to his abilities, to each according to his need." Geez, he made a big deal about his "community organizer" talent when he ran for President. He believes in his very core that an ideal government is one which features a belevolent father in Washington DC handing out favors and steering the country towards a glorious future. After all, they know better than you how to spend all that money you earn.


RE: Great photo
By Pirks on 2/28/2013 1:35:09 PM , Rating: 1
quote:
they know better than you how to spend all that money you earn
Exactly. They spend your money on NSF grants that in 100 years will yield a new space drive that would allow us to easily deflect incoming asteroid in 2135 or something like that. You, on the other hand, will spend your money on iToys, hookers and vodka (figuratively speaking of course), would you EVER give a DIME to some obscure mathematician from Harvard doing some voodoo equations and distributed Matlab magic that will be a foundation of a new space drive in 2128 or so?

See, government pretty much knows where to invest money. It's the government who invests money in fundamental science which drives all the planet. It's the government, not you or any other Reclaimer style redneck, who gave large sums of money to scientists developing foundations for modern fusion plasma physics, ITER, semiconductors, UV lithography, GPS and everything else you rednecks take for granted.

You know how much I wanted Gates, Jobs, IBM, Google, Ford, GM, GE, Raytheon, etc etc to invest like 20% of their profit in NSF grants and support fundamental studies and related graduates and undergrads? I want this to happen MUCH more than any Reclaimer redneck. But I, unlike you and Reclaimer rednecks, know for sure this will NEVER happen. Companies NEVER invest in fundamental science because it is the kind of investment that gives 10000% ROI... BUT NO EARLIER THAN IN 100 YEARS (in best case)

No one but the government will do such a crazy investment. See, I hate commies just like any other redneck like Reclaimer but you have to get some basic education and knowledge how the fundamental science works before spewing your BS here okay? ;)


RE: Great photo
By Solandri on 2/28/2013 4:40:10 PM , Rating: 2
quote:
See, government pretty much knows where to invest money. It's the government who invests money in fundamental science which drives all the planet. It's the government, not you or any other Reclaimer style redneck, who gave large sums of money to scientists developing foundations for modern fusion plasma physics, ITER, semiconductors, UV lithography, GPS and everything else you rednecks take for granted.

Actually, corporate R&D spending exceeds government R&D spending by more than 2:1.
http://www.aaas.org/spp/rd/guitotal.htm

I don't get what the big deal is. There is certain research (primarily industry-specific) which is better conducted by companies in the business. Some of it is beneficial to general research, like gains in DNA sequencing speed due to wanting to sell equipment which sequences faster. There is other research (primarily those with no immediate industrial applications) which is better conducted by government. And some of it is beneficial to industry-specific research.

IMHO any plan which calls for elimination of either government research or corporate research, is foolish and based solely on ideology rather than common sense.


RE: Great photo
By SPOOFE on 2/28/2013 5:15:29 PM , Rating: 2
quote:
would you EVER give a DIME to some obscure mathematician from Harvard doing some voodoo equations and distributed Matlab magic that will be a foundation of a new space drive in 2128 or so?

If he set up one hell of a Kickstarter, yup.


RE: Great photo
By Pirks on 2/28/2013 6:16:51 PM , Rating: 2
He can't set up Kickstarter because he can not predict the future, otherwise he may realize it's some other mathematician who should Kickstart his thing because it's this other mathematician's formulas that will shape the future. In other words, if you can't see the future, you don't know if it's your fundamental research that's going to reshape the planet or is it someone else's. So what's the point in Kickstarting it if maybe you're wrong and the other mathematician should Kickstart it for his more relevant stuff, not you?


RE: Great photo
By Reclaimer77 on 2/28/2013 6:17:16 PM , Rating: 2
quote:
See, government pretty much knows where to invest money.


AHAHAHAHA!!!!!!!!!!


RE: Great photo
By Pirks on 2/28/13, Rating: 0
RE: Great photo
By Reclaimer77 on 2/28/2013 7:24:11 PM , Rating: 2
I wish I was illiterate, then I wouldn't be able to read your retarded garbage Pirks.

p.s. if you're going to insult someone, try and have it actually make sense. Clearly I can read.


RE: Great photo
By Pirks on 2/28/13, Rating: 0
RE: Great photo
By Samus on 2/28/13, Rating: 0
RE: Great photo
By mjv.theory on 2/28/2013 12:24:57 PM , Rating: 2
What's like on your planet, where there are absolutely no other people?

Or perhaps you live on Earth as part of a human society, where, whether you like it or not, you are dependent on other members of society for pretty much everything you have. You presence on this forum is a clear proof that you are already part of the "collective". So analyse the reality of your situation more rigorously. It is not a matter of black shirts and red flags and the "free market" is a myth.


RE: Great photo
By Pirks on 2/28/2013 1:43:18 PM , Rating: 2
quote:
free market is a myth
Yeah, the Great Depression killed it for good in 1929, and good riddance! Reclaimer is too dumb to understand that tho...


RE: Great photo
By Mint on 2/28/2013 10:20:52 AM , Rating: 2
Without that initial investment, he either doesn't get off the ground or is delayed by years. Tesla lost $900B up to now to reach its state of impending profitability. The IPO only raised ~$200M.

Now that Musk has proven what he can do using the initial gov't+private funds, TSLA was able to issue more shares without the price tanking, is now deemed to be worth $4B by the free market, and can pay the gov't back.

So tell me, why wasn't the all knowing free market able to evaluate TSLA correctly in the first place?

The gov't is now going to get more money back than it put in, because the interest on these loans is bigger than its own borrowing costs. So we get a cutting edge company and a reduction in deficit (and yes, this will be true overall even including losses like Solyndra). Only you could be upset with that.


RE: Great photo
By tanjali on 2/28/2013 10:35:40 AM , Rating: 2
Because it is banking system that shape economy by its own merits and interest.


RE: Great photo
By Mint on 2/28/2013 12:45:24 PM , Rating: 2
Your english is a little broken here, but if you're saying the same thing as Rufus, my reply is below.


RE: Great photo
By RufusM on 2/28/2013 10:40:49 AM , Rating: 2
Well let's just have the government just invest in all sorts of things, no matter what the risk. After all, they have no risk to mitigate. They didn't earn the money lent and can easily replace it with more money even if it's lost. Let's all just vote in people who will give us free money.

While we're at it let's all join one big labor union so everyone in the US is guaranteed a $1M annual salary no matter what their job with all kinds of benefits. No one would ever lose their job because it would be impossible to fire anyone.

Win-win, right? How can that strategy ever lose?


RE: Great photo
By ptmmac on 2/28/2013 10:56:26 AM , Rating: 2
Woa there big fella. All we are asking for is a little bit of honesty, hard work and willingness to take risk from our leaders. It isn't like we haven't gotten that before. Look at some of the great leaders this country has had over the years. They were not locked down with fear and hatred. Unwillingness to take a risk has a cost all its own and it is more expensive than the alternative. The free market is based upon this idea. It is why we pay such a huge premium to risk takers like Musk.

Is it so hard to imagine a world where we get some good governance with all the bad you complain about? Such a world already exists, you just don't want to give any of the good guys any credit because you afraid some parasite might take something you imagine as yours. You are only going to be here for a short time and you are complaining about how unfair the world is and how governments are the source of all evil. That is a pretty big set of assumptions that most of the rest of us are unwilling to make.

Winston Churchill, one of the good ones I can think of off the top of my head, said that the only thing that we have to really fear is fear itself. Paralysis, fear and doubt are the enemies of the future. Don't mess it up for the rest of us with your extremist views, and we promise not to agree to loan you $450 million if you ask for it because you seem temperamentally unsuited to such a burden of responsibility.


RE: Great photo
By Reclaimer77 on 2/28/2013 11:23:16 AM , Rating: 1
Dude you're talking about a toy for the rich. Not the cure for cancer or a cold fusion reactor. Stop talking about a Ev for rich playboys like it's some tremendous benefit to mankind that we HAD to fund.


RE: Great photo
By Mint on 2/28/2013 11:54:57 AM , Rating: 2
Are you really that myopic?


RE: Great photo
By Pirks on 2/28/2013 1:38:55 PM , Rating: 2
Yeah Reclaimer is beyond idiotic here, I'm baffled. Didn't think he's THAT dumb :(


RE: Great photo
By Samus on 2/28/2013 11:49:24 PM , Rating: 1
dude seriously...a toy for rich people? The same could have been said about the model t when most people still used horse and carriage. Or commercial air travel when us peons still had to take the train...

every evolutionary step starts small and concentrated before it becomes mainstream. Everything.


RE: Great photo
By m51 on 2/28/2013 1:49:35 PM , Rating: 2
I believe automobiles were also called 'Toys for the Rich' back when Henry Ford wanted to bring out his Model T.

It's not about a car, it's about an industry.


RE: Great photo
By Reclaimer77 on 2/28/2013 4:04:23 PM , Rating: 2
And Henry Ford got millions in loans from the Government's green energy grant??

Great analogy, MORON. Do you even understand the argument? If Tesla used his considerable funds for this venture, or sought private investments, I wouldn't be saying a WORD about it.


RE: Great photo
By Solandri on 2/28/2013 4:57:36 PM , Rating: 2
Society in Henry Ford's day and time wasn't facing an impending horse feed shortage.

Whether you believe oil has passed peak production, or that we still have 50-100 years left until peak production, everyone's agreed that at some point it's going to run out. Gradually, but the price will gradually increase in the meantime.

If you rely totally on market forces, there's a time delay between when oil prices go up, research in alternatives begins, and the technology finally comes to market. All the while you're paying exorbitantly high oil prices to keep your industrial engine running.

If you instead pre-research those technologies before market forces would naturally kick in that research, you can speed up and ease that transition period. I view government loans for EV research as insurance. Maybe it'll pay out, maybe it won't. But I'll sleep better knowing we have a plan in place instead of waiting until the last minute to tackle it. Likewise, if the average corporate R&D plan had a 10-20 year timeline, I'd feel comfortable letting private industry handle it. But most corporate planning has a 1-3 year timeline. I don't think that's long enough to ensure a smooth transition from oil to some other transportation power source.

Note: I think EVs are a dead end, and that biofuels will win out in the end. Unless we start building nuclear plants out the wazoo for electrical power or there's a breakthrough in nuclear fusion. But R&D spending always carries with it the risk that you won't get anything useful out of it. The companies which abandon R&D for guaranteed profitability usually do pretty poorly, like HP. So even though R&D is a gamble, it's usually a good bet to take. Even if EVs turn out to be a bust, some of the improvements in battery tech should spill over into batteries for mobile devices, so some of the cost will still be recouped.


RE: Great photo
By Mint on 2/28/2013 5:50:50 PM , Rating: 2
quote:
I think EVs are a dead end, and that biofuels will win out in the end. Unless we start building nuclear plants out the wazoo for electrical power or there's a breakthrough in nuclear fusion.
Electrical power is not the limitation.

If we put half our 3 trillion annual miles on the grid today (which will take a good 150 million EV sales), we'd only need ~10% of our current electricity production to fuel it. We have that much generation capacity sitting idle off-peak already.


RE: Great photo
By Rukkian on 3/1/2013 9:39:16 AM , Rating: 2
quote:
But most corporate planning has a 1-3 year timeline.


Actually with everybody seemingly only in for a quick buck in the stock market, many seem to only have a 3-6 month outlook, and are willing to forget any sort of long term goals for the quick buck to make the stock uptick a few points.


RE: Great photo
By RufusM on 2/28/2013 11:30:45 AM , Rating: 2
My previous post was hyperbole.

The thing is, the US Government is in business to be a stable entity and fulfill its constitutional mandates. We've recently had a government completely at odds with these notions, spending itself into oblivion.

The economy already has institutions designed solely to assess risk and lend money. If they won't do it, why does the government think it can do better? Adding to that, the government is influenced by non-economic pressures, so they often don't make the right decisions when it comes to the economy.

Private business does stupid things too, but when a private business fails, the entire country doesn't suffer. If a private business is ever allowed to get to the point where it cannot be allowed to fail, then clearly government regulations aren't working and we need better.


RE: Great photo
By Mint on 2/28/2013 12:35:07 PM , Rating: 2
quote:
The economy already has institutions designed solely to assess risk and lend money. If they won't do it, why does the government think it can do better?
The job of the banks is to make money (and competition of course keeps that in check). One job of the gov't is to maximize economic growth given the current conditions. Those two goals are often one and the same, but we're in a peculiar situation now.

Historically, there has never been any shortage of safe lending opportunities for banks. They take peoples deposits, keep 10% as a mandatory reserve, and lend all of the rest back out to the lenders willing to pay the highest interest rate (which, in general, is the borrower who will provide the greatest long term economic benefit). All capital is being used efficiently, so there's no need for the gov't to step in.

Now we hit a wall and it's the opposite. There's a shortage of borrowers that the banks trust, at least compared to the vast amounts being saved. This is proven by the excess reserves and record low rates. This means banks will only optimize a certain fraction of the capital available, not all of it.

So there's a lot of money sitting around doing nothing. Banks can't find more safe places to invest. The private market has ~$10T in bank deposits near 0%, and another ~$10T in gov't debt near 0%, so they're fresh out of ideas for more investment. The fundamental problem here is that people with low disposable income can't consume more, and people with higher income aren't consuming by choice, so businesses have no reason to produce more and hire. It's a demand problem.

So tell me: Why shouldn't the gov't be a last resort for investing idle capital (monetary and human) under these circumstances where nobody else is doing it? How do we - as a society - gain by leaving it idle?


RE: Great photo
By Reclaimer77 on 2/28/2013 4:10:11 PM , Rating: 2
quote:
One job of the gov't is to maximize economic growth given the current conditions.


No, that is not a "job" of the Government. What-so-ever. No wonder you are the way you are.

The Government cannot grow the economy. The best it can do is get out of the way.

quote:
Why shouldn't the gov't be a last resort for investing idle capital


Idle capital? We're trillions in debt.


RE: Great photo
By Solandri on 2/28/2013 5:10:31 PM , Rating: 1
quote:
The Government cannot grow the economy. The best it can do is get out of the way.

There are a handful of situations where if individuals each act in their own best interests, it results in a suboptimal or even worst possible outcome for everyone.
http://en.wikipedia.org/wiki/Tragedy_of_the_common...

In those cases, yes the government can help grow the economy. The trick is in recognizing when you do and don't have one of these situations. Unfortunately some people falsely believe no such situations exist. While others falsely believe the mere existence of such situations means the opposite situation does not exist (i.e. "the free market doesn't work").

tl;dr - Sometimes government regulation is good for the economy, sometimes it is bad. The best outcome is achieved when you allow free market to do its thing when appropriate, and allow government regulation when appropriate.


RE: Great photo
By Reclaimer77 on 2/28/2013 6:01:50 PM , Rating: 2
I actually agree with you. However this isn't a debate about Government regulations, as much as it is about the Government playing investment capitalist with a side of Cronyism, with redistributed wealth.

Actually is really simple. Mint is in favor of Tesla, so he's trying to make an argument that the loans are good for all of us. Which is absurd.

If Mint and everyone with his mindset had sent Musk a check for $25 or so bucks, we wouldn't be having this discussion. But the problem with our society is that people rather wield Government power like a blunt instrument. They prefer the Government to take money from others and spend it to the things they care about. Except around half the people in this country of voting age pay no Federal income taxes, so why should they care about Government spending or tax policy?

I'm guessing Mint falls under this bracket too.


RE: Great photo
By Mint on 2/28/2013 6:47:22 PM , Rating: 2
quote:
If Mint and everyone with his mindset had sent Musk a check for $25 or so bucks, we wouldn't be having this discussion
Wrong. That was already tried, and he only raised ~$200M. It's called an IPO.

The gov't loan gave him the rest of what was needed to get moving. Only then could Tesla convince people to invest the next billion.
quote:
Mint is in favor of Tesla, so he's trying to make an argument that the loans are good for all of us
I am in favor of the public to vote for whatever spending they think is worthwhile, just like you (and I, incidentally) are in favor of investments in nuclear power, which the free market has done an awful job of investing in by itself. I don't hear you asking for Obama to stop those loan guarantees, which are finally spurring at least a little progress.


RE: Great photo
By Reclaimer77 on 2/28/2013 6:54:42 PM , Rating: 2
quote:
Wrong. That was already tried, and he only raised ~$200M. It's called an IPO.


You're actually making my point for me. Hello!!!

So if Tesla wasn't important enough for you (the figurative you) to invest in, don't turn around and then claim the Government needs to pick up the slack! That is not the purpose of this Government. It's why we're in the mess we're in today.

As far as you comparing nuclear power generation, a public service/good, to an electric car for the rich....WOW!


RE: Great photo
By Mint on 2/28/2013 7:34:43 PM , Rating: 2
quote:
So if Tesla wasn't important enough for you (the figurative you) to invest in, don't turn around and then claim the Government needs to pick up the slack!
I'm not turning around from anywhere. It is important enough, which is why it's now worth $4B. However, it was stuck in a catch-22: people don't invest if they're not sure Musk can pull it off, and Musk can't show them that he can pull it off without people investing.
quote:
It's why we're in the mess we're in today.
LOL I'd love to hear the bunk logic you used to conclude that...
quote:
As far as you comparing nuclear power generation, a public service/good, to an electric car for the rich....WOW!
This is the myopia I was referring to before. I drove a BMW as a grad student because somebody else bought it 6 years before me and I got it at 1/5th the MSRP. 10 years from now a family will be driving a Model S built today and they'll be saving >$2k/yr on gas.

When Panasonic started making big screen plasma TVs, they cost $8000. Now they cost <$800. An industry has to start somewhere.


RE: Great photo
By Pirks on 2/28/2013 8:42:58 PM , Rating: 2
quote:
industry has to start somewhere
Reclaimer is too dumb to understand such simple things


RE: Great photo
By Pirks on 2/28/2013 8:38:44 PM , Rating: 2
quote:
As far as you comparing nuclear power generation, a public service/good, to an electric car for the rich
Cars were for the rich a while ago, same with electric cars now. All smart people understand that, but rednecks don't need to apply.


RE: Great photo
By Mint on 2/28/2013 5:34:34 PM , Rating: 2
quote:
No, that is not a "job" of the Government. What-so-ever. No wonder you are the way you are.
Yeah you go ahead and tell that to the American people who had the economy as their #1 issue on both sides of the isle.

Just move to Somalia already and live in your minimal government paradise.

quote:
The Government cannot grow the economy. The best it can do is get out of the way.
You're living in the past. Every modern gov't that tried to get out of the way during this recession saw its economy shrink and make the problem worse.
quote:
Idle capital? We're trillions in debt.
I guess the tea party has brainwashed any semblance of economic logic from your head. The two have nothing to do with each other.

Educate yourself on excess reserves.


RE: Great photo
By Reclaimer77 on 2/28/2013 5:54:34 PM , Rating: 2
quote:
Yeah you go ahead and tell that to the American people who had the economy as their #1 issue on both sides of the isle.


Yeah it was such a big issue, they re-elected the guy who made the economy worst and continues to! They identified the problem, but utterly failed in choosing the solution.

quote:
You're living in the past. Every modern gov't that tried to get out of the way during this recession saw its economy shrink and make the problem worse.


That's absolutely false. We're living proof that you cannot spend your way out of a bad economy. Did the stimulus work? Has anything worked? If you were right, the past 5 years of record spending would equal record prosperity and economic growth. Hello?

But there is good news, the GDP actually grew last quarter. By a tenth of a percent. I guess that's an affirmation, in your mind, of the big Gov approach you're shoveling.

quote:
Just move to Somalia already and live in your minimal government paradise.


That is a petty Red Herring, and doesn't come close to being a reasonable retort.


RE: Great photo
By Pirks on 2/28/2013 7:06:46 PM , Rating: 1
quote:
Did the stimulus work? Has anything worked? If you were right, the past 5 years of record spending would equal record prosperity and economic growth. Hello?
You are illiterate and you have no idea how the inaction of the federal government worked out real nice in 1929. People like you in the government back then ran the country into near total economy destruction and chaos. Obama saved it from total destruction and chaos by his urgent stimulus money. Time to say Hello to your dead brain, troll :)


RE: Great photo
By Mint on 2/28/2013 7:07:13 PM , Rating: 2
quote:
Yeah it was such a big issue, they re-elected the guy who made the economy worst
Yeah, you go ahead and believe that. Not one person who thought Obama made the economy worse voted for him.
quote:
That's absolutely false. We're living proof that you cannot spend your way out of a bad economy. Did the stimulus work? Has anything worked? If you were right, the past 5 years of record spending would equal record prosperity and economic growth.
Why are you so dense? If a man bailing water keeps his boat afloat, would you say the bailing isn't working because his ship ran much better when he left the dock and wasn't bailing?
quote:
But there is good news, the GDP actually grew last quarter. By a tenth of a percent. I guess that's an affirmation, in your mind, of the big Gov approach you're shoveling.
Once AGAIN you're stuck living in the past. This economic environment is nothing like whatever time period you're comparing to in your head.


RE: Great photo
By Reclaimer77 on 2/28/2013 7:14:17 PM , Rating: 2
Okay I apparently cannot have a fiscal debate with you, because you've created your own economic theory where traditional metrics used to measure economic activity and health are "things of the past" now. Arbitrarily, because you said so. GDP is a thing of the past? That's...that's brilliant.

Good luck shoveling that when our economy collapses...


RE: Great photo
By Mint on 2/28/2013 7:44:59 PM , Rating: 2
If I said $2 gas is a thing of the past, that doesn't mean I think the traditional metric of dollars is a thing of the past, genius.

But if you want to show off your strawman construction ability, go ahead...


RE: Great photo
By tanjali on 2/28/2013 10:58:51 AM , Rating: 2
Well how about we voted for government to regulate our economic system in interest of people, or majority of people! Blasphemy! Even worse Socialism! How about we vote for or just elect IMF or similar institution to regulate our or world economy for that matter? Less taxes, or is it?


RE: Great photo
By RufusM on 2/28/2013 11:35:48 AM , Rating: 2
I agree, the government should regulate the market, allowing healthy competition and allowing companies to prosper or fail based on their merits, not a handout.


RE: Great photo
By Mint on 2/28/2013 12:52:23 PM , Rating: 2
If you end handouts, then everyone receiving one has to reduce the goods/services they buy with them, which means the businesses producing them lose orders and lay off even more people, who in turn reduce their consumption and the cycle viciously repeats.

If we have millions of people of people out of work today that business have shown no need to hire, why on earth would they hire more when they have less stuff to produce in a handout-free world?


RE: Great photo
By RufusM on 2/28/2013 1:11:26 PM , Rating: 2
You're right, what would Elon Musk do without the government loan? He would only have billions to fall back on.

More to your point about handouts for everyone: You're absolutely right in that it's much harder to reverse dependency that it is to create it. Just ask any addict. That's why it should be avoided in the first place.

For your example, there would be a short-term contraction in the economy as people consume a little less. Once equilibrium is reached, expansion will start to occur as money is invested in those areas providing return, creating new jobs and the economy will grow again. As growth happens, people will become employed again and will earn their living. The impact of this can be lessened by reducing handouts bit by bit though so there are ways it can be done less painfully.


RE: Great photo
By Mint on 2/28/2013 6:28:59 PM , Rating: 2
quote:
You're right, what would Elon Musk do without the government loan? He would only have billions to fall back on. - See more at: http://www.dailytech.com/Article.aspx?newsid=30009...
Musk was almost broke in terms of tangible assets, and put everything he had into Tesla. He's a billionaire from his paper wealth, i.e. his stake in SpaceX and Tesla.
quote:
Once equilibrium is reached, expansion will start to occur as money is invested in those areas providing return
No it won't. There is no shortage of such money today with the handouts. We actually have more annual investment in corporate equipment today than we ever have, but that's still not enough investment to use all the money that the debt-free are saving.

There is no limit of available capital today. There's tens of trillions of dollars seeking merely 2% average return to no avail. So tell me, how do you get more business opportunity from an economy that is less capable of purchasing its products?


RE: Great photo
By Reclaimer77 on 2/28/2013 6:35:27 PM , Rating: 2
quote:
Musk was almost broke in terms of tangible assets, and put everything he had into Tesla.


Gee I can't imagine why he would have a hard time finding private investments. Clearly the free market was at fault there. High risk, virtually no payoff. Brilliant!

Hey didn't our economy collapse in 08' partly because of bad lending practices to people who couldn't pay loans back? Hmmmm, perhaps there's some correlation here...


RE: Great photo
By Reclaimer77 on 2/28/2013 4:16:19 PM , Rating: 2
quote:
If you end handouts, then everyone receiving one has to reduce the goods/services they buy with them, which means the businesses producing them lose orders and lay off even more people, who in turn reduce their consumption and the cycle viciously repeats.


Wow...this says SO much about you. And it's not very flattering.

You realize capitalism has a far superior track record compared to any form of wealth-redistribution right? I don't know how old you are, but you need to get a clue.


RE: Great photo
By Mint on 2/28/2013 6:14:20 PM , Rating: 2
Buddy, get out of the past. I don't know how old you are, but you need to get a clue ;)

http://research.stlouisfed.org/fred2/series/EXCRES...

Do you get it? This has never happened before. The track record means nothing. Macroeconomic mechanisms from the past are completely inapplicable today. When you save a dollar, it no longer goes towards a mortgage or business loan that funds something of value. It just sits on a pile of $2 trillion dollars (which actually represents $20T of missing economic activity after money multiplier) doing nothing.

The free market is actively choosing to watch tens of trillions of capital earn negative real interest instead of building or buying anything, and it's done it for over four years. That is indisputable fact, not opinion.

Think about how absurd that is for a moment.

Capitalism is making a cry for something more to build, and nothing in the free market is giving it to them.


RE: Great photo
By Reclaimer77 on 2/28/2013 6:43:46 PM , Rating: 2
quote:
The free market is actively choosing to watch tens of trillions of capital earn negative real interest instead of building or buying anything, and it's done it for over four years. That is indisputable fact, not opinion. Think about how absurd that is for a moment.


It's not absurd at all. That's what happens when consumer confidence bottoms out and you have a Keynesian in the White House running wild.

quote:
Capitalism is making a cry for something more to build, and nothing in the free market is giving it to them.


That's Capitalism self-regulating itself. Perhaps you've seen the workforce participation numbers lately? Not the unemployment number which we all know to be way lower than the actual, I'm talking workforce. Notice something?

This fantasy you've created is just that, a fantasy. Building something when demand is low or nonexistent, just for the sake of it, is crazy.

You are only seeing one half of the equation, your ideology is blocking the obvious conclusion to all this. Even in a great economy, Tesla's market is TINY!


RE: Great photo
By Mint on 2/28/2013 8:10:29 PM , Rating: 2
quote:
Building something when demand is low or nonexistent, just for the sake of it, is crazy.
DING DING DING! Reclaimer FINALLY realizes that the reason businesses aren't hiring is because there is nothing to produce! By your own observation, supply sider policies only help crazy companies.

So now let me help you put two and two together:

- Lower taxes for the rich isn't going to help demand, especially when the wealthy will take the exact same amount out of the private market to buy the extra treasuries needed to pay for the loss of tax revenue.

- Lower taxes on businesses isn't going to give them demand.

- Less redistribution/entitlements is going to LOWER their demand.

- A cheaper and more desperate labor force from a smaller safety net isn't going to create demand

- Cutting the contracts that the gov't gives to businesses isn't going to create demand

Do you get it yet? All the tea party policies make the economy WORSE. None of them address the core problem of demand.
quote:
Even in a great economy, Tesla's market is TINY!
Guess what: The gov't loan to Tesla is correspondingly TINY! The EV subsidy as a percent of the auto industry size is TINY!


RE: Great photo
By RufusM on 3/1/2013 10:53:34 AM , Rating: 2
Reclaimer is stating there is extremely soft demand for EVs, not aggregate demand. Guess what would happen if everyone bought EVs: The demand for electricity would be so high the infrastructure couldn't keep up. It takes years of red-tape to build new electric plants. Plus it's not popular to want coal, natural gas or nuclear, which are the most abundant and inexpensive options for electricity, so the price of it would be high for everyone, not just those with EVs.

To your point on handouts/entitlements:
Expanding handout/entitlements money only increases artificial demand in the very short term. As soon as those payments stop, the short term demand does too so they can NEVER be stopped or reduced once allocated. As I said before, it's easy to create dependency but much harder to stop it. Just ask any addict. Just look at the Cash for Clunkers program. As soon as the money went away, the artificial demand it generated went away too. It creates a mini-boom then crash after.

I understand your point about investing in in new technology for the future. That's the very thing that grows the economy in a long term manner, but the US Government doesn't have a crystal ball. Investors and banks are FAR better equipped to provide capital based on their experience of risk assessment. If they determine it's high-risk, why should the government risk it? Especially the US Government when they are already on the verge of bankruptcy. The US Government is constantly expanding, taxing more money to feed its growth. It's not an efficient entity because it has no competition. If it continues, everyone will eventually be working for the government and we'll have communism or a similar facsimile of it.

The thing is, money will always be spent on something: Money is a bank is loaned and spent, money in someone's pocket is spent on their needs/wants, etc. The key is finding where the money is best spent to provide the biggest boost to the economy. Money will naturally flow to the best investments to grow the economy in a long-term manner (in an economy with reasonable regulation and market forces), not just a short term artificially-stimulating demand manner.

Artificially stimulating demand and re-distributing wealth is much less effective, in the long term, than its natural distribution through regulation and market forces. With proper regulations and healthy competition everyone wins.


RE: Great photo
By Reclaimer77 on 3/1/2013 2:29:44 PM , Rating: 2
Well put but he'll just say you're living in the past too. Money grows from trees and debt doesn't matter. In fact it's good.

His analogy about the man bailing out this sinking boat is very disturbing. He actually believes it's the government keeping us afloat instead of pulling us down.


RE: Great photo
By Pirks on 3/1/2013 4:34:58 PM , Rating: 2
quote:
it's the government keeping us afloat instead of pulling us down
Shhh no one please tell this redneck about 1929 and how nicely government "involvement" kept this country "afloat", or his tiny fox news fed brain will pop


RE: Great photo
By RufusM on 3/1/2013 5:26:43 PM , Rating: 2
I agree that more government regulation was needed in 1929. The 1933 Banking Act was needed for monetary stability. We need to go back to having separate Commercial and Investment banks.

Like I said, it's a balance of regulation and natural market forces. We don't want too much government regulation/taxation stifling the economy or natural supply and demand forces, nor do we want too little regulation/taxation where companies can do whatever they want and not pay their share in.

We've seen what happens in both cases and it's not pretty.


RE: Great photo
By ClownPuncher on 2/28/2013 1:13:09 PM , Rating: 1
You bought your house with cash, you greasy guido?


RE: Great photo
By rabbitslayer21 on 2/28/2013 10:45:46 AM , Rating: 2
He looks like Edward to Obama's Jacob. If you'll pardon the comparison.


Amazingly poor arguements
By foxalopex on 3/1/2013 10:05:39 AM , Rating: 2
I'm surprised that folks would be absolutely against bail-outs and loans. We need them to survive. Just read up on the history of the Great Depression and you'll understand. One of the causes aside from the free market crashing was the government at the time refusing to bail-out anything. Once everything bottomed out the government was powerless to do anything until WWII. (Which is a government initiative if you think about it.)

I think in the long run we as a society in general have a consumption problem. We have an economy setup such that we need to consume ever greater amounts of resources to continue to be profitable. It's going to result in a crash someday that no one will be able to recover from.

If you actually watched "Revenge of the Electric Car" Musk nearly personally bankrupted himself to build an electric car. In fact, without this government loan, I doubt the company would have survived. The Chinese are well on their way to developing electric cars, in fact some of the largest solar cell manufacturers are located there. I think the US in general is smart to invest a tiny amount of money in it's own strategic interests. Look up the cost of a supersonic bomber someday and ask yourself, is having your own electric car company worth the cost of a single warplane?




By jack daniels esq on 3/2/2013 2:25:52 PM , Rating: 2
Musk is second cousin to the water closet murdering blade runner from SA - und Obama, or so we are led to believe


teehee
By MadMan007 on 2/28/2013 4:43:21 PM , Rating: 2
I am highly entertained by the apoplectic posts of the Randian government haters now that they see a government loan working out.




"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA











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