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Another Green Energy ObamaLoan Turns into Red Ink

Written by Gary North on April 13, 2012

Solyndra was the first domino. This latest bankruptcy will take with it maybe $50 million or maybe $100 million. The bankruptcy lawyers will hammer out a settlement.

The U.S. government had put up a $2.1 billion loan guarantee. We will not know for years how much money in the hole the latest solar energy company was.

What is a loan guarantee? It is better known as co-signing. In the language of the King James Version, it is surety, as in “sure loss.” The Book of Proverbs repeatedly warns against this practice.

Loan guarantees by the federal government are often said to cost the government nothing. Then comes a bankruptcy. The defenders say nothing. No one notices. The political fanfare and high-fives that were visible at the beginning of the process become entombment silent.

A long story on this boondoggle was posted on the Zero Hedge site. The anonymous “Tyler Durden” reports that “the company which proudly held the rights to the world’s largest solar power project, the hilariously named Solar Trust of America (“STA”), filed for bankruptcy.”

The original press release on this turkey promised that there would be 1,000 permanent jobs created, plus “7,500 indirect jobs in related industries throughout the United States, and more than 200 long-term operational jobs at the facility itself. It will play a key role in stimulating the American economy.”

The bankruptcy lawyers will do very well.

This is an ongoing soap opera.

As Bloomberg notes: “The company joins Energy Conversion Devices Inc., a U.S. solar manufacturer that suspended production last year; LSP Energy LP, the owner of a natural-gas-fired power plant in Mississippi; Ener1 Inc., maker of lithium-ion batteries for plug-in electric cars; solar-panel maker Solyndra LLC; and energy storage company Beacon Power Corp. (BCONQ) in bankruptcy.”

Here is a section from the original press release from the Department of Emergy’s head honcho, Stephen Chu.

“Loan guarantees play an important role in facilitating the development and deployment of innovative technologies at massive scope and scale. Continued investments like this project make solar power more efficient and cost competitive while creating thousands of jobs and strengthening the economy.”

Then there was the original statement from Gov. Jerry “Forever” Brown. (He was governor 35 years ago. His father was governor before him, when I was in high school there.) “California is the national leader in clean energy, and our great state is poised to become the world leader in renewable energy generation. I commend President Obama and Secretary Chu for making another major investment in California.”

YouTube has preserved the press conference. Think of it as a government-guaranteed gravestone.

This is standard stuff. It will not end until Washington’s checks bounce. Think of it as one more footnote in an ongoing book written by the disciples of Ludwig von Mises: He Told You So.

Continue Reading on www.zerohedge.com

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6 thoughts on “Another Green Energy ObamaLoan Turns into Red Ink

  1. MY MY, isn't Obama one hell of a business man (LMAO) It seems everything he gets involved in turns to RED INK. What an IDIOT. I bet the US would save hundreds of Billions of $$$$ If he wouldn't do nothing and just stay on vacation. Oh yeah and take his little Pork Rib eating Old Lady with him.

  2. Junk Bin says:

    Gov. Jerry “Forever” Brown. (He was governor 35 years ago. His father was governor before him, when I was in high school there.) “California is the national leader in clean energy, and our great state is poised to become the world leader in renewable energy generation. I commend President Obama and Secretary Chu for making another major investment in California.”
    Actual, California is bankrupt due to myopic eco liberal waco ideas. We will spend more money on things that do not work because we are smarter. We also do not believe Einsteins saying " Insanity is doing the same thing and expecting a different result." We have a lot of stupid people in California

  3. Bill McCroskey says:

    STA (Solar Trust of America) is more like a STD …. well ….. if you think about it, the cause (of STD's) and the end result (STA's bankruptcy) require the same physical action resulting in the taxpayers getting (…..insert your own euphemism….) either way.

  4. Why blog get in the face of your elected officials with recorders and show the responce to the pepole so we the pepole can see the truth instead of the lies the main stream media and corperate America shoves in our face.

  5. sean murry says:

    He is no business man but getting to tear down this country on purpose.

  6. jimpeel7734 says:

    I cannot lay my finger upon that section of the Constitution which allows for the government to act as venture capitalists with the taxpayer's moneys in which they have been entrusted.