Friday, February 17, 2012

Subsidies destroy wealth

...by moving assets from higher- to lower-valued uses: .

...General Electric’s Shepherd Flat project in northern Oregon is worst in blowing lots of taxpayer resources. Not only did the Energy Department give GE and their partners a $1.6 billion loan guarantee, but as soon as the turbines start running, the Treasury Department will ante up an additional $490 million cash grant.

According to plan, an important intent of this charity is to create 35 permanent new “green energy jobs”. Focusing upon just the $490 million cash grant alone, some skeptics may question whether the taxpayer cost of $16.3 million for each of those jobs might be just a little bit steep.

Our government makes it hard to distinguish reality from satire.

...while the sponsor’s contribution amounted to only about 11 percent of the total cost, they would receive an “estimated return on equity of 30 percent.” It also explained that the carbon dioxide reductions associated with the project “…would have to be valued at $130 per ton for CO2 for the climate benefits to equal the subsidies…more than six times the primary estimate used by the government in evaluating rules.”

No comments:

Post a Comment