Tag Archives: Bankruptcy

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Solar power firm goes bankrupt after receiving millions of taxpayer dollars

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From the Boston Herald, a look at what happens when the government redistributes wealth based on political correctness.

Excerpt:

Evergreen Solar Inc., the Massachusetts clean-energy company that received millions in state subsidies from the Patrick administration for an ill-fated Bay State factory, has filed for bankruptcy, listing $485.6 million in debt.

Evergreen, which closed its taxpayer-supported Devens factory in March and cut 800 jobs, has been trying to rework its debt for months. The cash-strapped company announced today has sought a reorganization in U.S. Bankruptcy Court in Delaware and reached a deal with certain note holders to restructure its debt and auction off assets.

The Massachusetts Republican Party called the Patrick administration’s $58 million financial aid package, which supported Evergreen’s $450 million factory, a “waste” of money.

“The bankruptcy of Evergreen Solar is another sad event for the Massachusetts company and highlights the folly of the Patrick-Murray Administration which has put government subsidies into their pet projects instead of offering broad based relief to all Bay State employers,” said Jennifer Nassour, head of the state GOP.

Here’s a previous story about another solar-power boondoggle, from the Daily Caller.

Excerpt:

Solyndra, Inc. was supposed to have showcased the effectiveness of the Obama administration’s stimulus and green jobs initiatives, but instead it has become the center of congressional attention for waste, fraud and abuse of such programs.

According to a Feb. 17 letter signed by Energy and Commerce Committee Chairman Fred Upton, Michigan Republican, and Oversight Subcommittee Chairman Cliff Stearns, Florida Republican, to Energy Secretary Steven Chu, the Fremont, Calif.-based solar panel manufacturer should never have received a $535 million loan guarantee from the stimulus.*

The company became the first recipient of an Energy Department loan guarantee under the stimulus in March 2009, which was intended to “finance construction of the first phase of the company’s new manufacturing facility” for photovoltaic solar panels.

The Energy Department estimated in a March 20, 2009 press release that the loan guarantee would create 3,000 construction jobs and a further 1,000 jobs after the plant opened.

And President Barack Obama and Vice President Joseph Biden each personally showcased Solyndra as an example of how stimulus dollars were at work creating jobs, during appearances at the company over the course of the following year.

Biden personally announced the closure of Solyndra’s $535 million loan guarantee in a Sept. 9, 2009 speech, delivered via closed-circuit television, on the occasion of the groundbreaking of the plant.

The vice president justified the federal government’s investment in Solyndra in front of employees and other dignitaries, including Secretary Chu and former Calif. Gov. Arnold Schwartzenegger, saying the jobs the company intended to create would “serve as a foundation for a stronger American economy.”

“These jobs are the jobs that are going to define the 21st century that will allow America to compete and to lead like we did in the 20th century,” Biden said.

According to Biden’s speech, the $535 million loan guarantee was a smaller part of the $30 billion of stimulus money the administration planned to spend as part of its Green Jobs Initiative.

Obama made similar claims in a May 26, 2010 speech at the plant, but the 1,000 jobs he and Biden touted in their respective speeches failed to materialize.

Instead, Solyndra announced on Nov. 3 it planned to postpone expanding the plant, which put the taxpayers on the hook to the tune of $390.5 million taxpayers**, or 73 percent of the total loan guarantee, according to the Wall Street Journal.

It also announced that it no longer planned to hire the 1,000 workers that Obama and Biden had touted in their speeches and that it planned to close one of its older factories and planned to lay-off 135 temporary or contract workers and 40 full-time employees.

A closer look at the company shows it has never turned a profit since it was founded in 2005, according to its Securities and Exchange Commission (SEC) filings.

And Solyndra’s auditor declared that “the company has suffered recurring losses, negative cash flows since inception and has a net stockholders’ deficit that, among other factors, [that] raise substantial doubt about its ability to continue as a growing concern” in a March 2010 amendment to its SEC registration statement.

“While we understand the purpose of the Loan Guarantee Program is to help private companies engaging in clean energy products to obtain financing by providing loan guarantees, subsequent events raise questions about Solyndra was the right candidate to receive a loan guarantee in excess of half a billion dollars,” Upton and Stearns wrote.

A June 2010 Wall Street Journal report indicating that Solyndra’s majority owner, Oklahoma billionaire George Kaiser, was a major fundraiser for the 2008 Obama-Biden campaign has stimulus opponents such as Citizens Against Government Waste crying foul.

Even the radically left-wing Huffington Post is getting the picture, in this article entitled “The Party’s Over for Big Wind“.

Excerpt:

Here’s the reality: the backlash against industrial wind is real, it’s global, and it’s growing. The U.S. has about 170 anti-wind groups. AWEA doesn’t want you to know that a number of towns in New York state have prohibited the construction of industrial wind turbines. In April, the town of Falmouth, Massachusetts enacted a year-long moratorium on construction of new wind turbines. And earlier this month, a pair of environmental groups in Massachusetts called for a ban on new turbines in the state until more work is done on the health effects of wind turbine noise.

The wind lobby is desperate to downplay the problem of infrasound from wind turbines. But this month, in a peer-reviewed article in the Bulletin of Science, Technology & Society, Carl V. Phillips, a Harvard-trained PhD, concludes that there is “overwhelming evidence that wind turbines cause serious health problems in nearby residents, usually stress-disorder type diseases, at a nontrivial rate.”

The subsidies for wind energy are in peril. A recent report from the Energy Information Administration shows that in 2010, the wind energy sector got more federal subsidies than any other energy sector other than biofuels. The report found that wind energy got a total of $4.986 billion in subsidies, or nearly twice as much as was given to the oil and gas sector, which got $2.82 billion. The majority of the wind energy money came from the federal stimulus package passed in 2009. But much of that stimulus money has been spent.

Last December, AWEA cheered after Congress approved a tax bill that included a one-year extension of the investment tax credit for renewable energy. But another high-profile renewable energy subsidy, the tax credit for the corn ethanol scam, is due to expire at the end of this year. And given that Republicans in Washington are eager to cut all types of federal spending, the investment tax credit is likely to, once again, be in legislators’ cross hairs.

Bode was right a year ago when she said the wind industry is in distress. Her industry’s still in peril today because it cannot survive without mandates and taxpayer subsidies. And unless or until it can, she cannot expect any sympathy from cash-strapped voters.

Why are we wasting money on unproven technologies? Do we have money to waste on old-time religion?

News

The U.S. government sends out 200 million checks per month

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Marco Rubio talks about how the massive spending spree started when the Democrats took control of the House and Senate in 2007, and about how the Democrats have been running government for 2.5 years without a budget, and about Obama’s silly budget proposal which was rejected 97-0 in the Senate. He also hammers Obama for not putting forward a plan, the need to create more jobs in order to get more people to pay taxes without raising tax rates, anf the need to reform entitlement programs in order to save them. He also takes questions from John Kerry.

Why is there so much spending? Radical leftist Ezra Klein explains why in this Washington Post article.

Excerpt:

I’ve been saying the federal government sends out 80 million checks a month, a number I got from the Bipartisan Policy Center. The president says the government sends out 70 million. Alec MacGillis says we’re both wrong:

The figures used by Obama and Geithner were, if anything, too low. They relied on Treasury Department figures from June that include Social Security (56 million checks that month), veterans benefits (4.5 million checks), and spending on non-defense contractors and vendors (1.8 million checks).

But those numbers do not include reimbursements to Medicare providers and vendors (100 million claims in June), and electronic transfers to the 21 million households receiving food stamps.

Nor do they include most spending by the Defense Department, which has a payroll of 6.4 million active and retired employees and, on average, pays nearly 1 million invoices and 660,000 travel expense claims per month.

Obama’s and Geithner’s statements were hyperbolic only in one sense: The vast majority of the payments are now electronic, not checks per se. Of the roughly 80 million payments that the Treasury Department made in June, just 12 million were paper checks, half of them to Social Security recipients who prefer to get their allotment in the mail.Yikes.

John Hawkins of Right Wing News tweeted this today:

Democrats are selling your children into slavery so they’ll have more cash to give to bribe their supporters with.

Most of the time the government writes a check, it is redistributing money from those who work and earn to some other group of people who did not earn that money. In some cases, these expenditures are legitimate – as with defense. But in other cases, it is just borrowing from children’s futures in order to pay off other people who should be taking responsibility for their own lives.

News

Would the Republican “cut, cap and balance” plan solve the debt crisis?

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Let’s take a look at the Republican “Cut, Cap and Balance” plan, as reported by CBS News.

Excerpt:

The House next week will take a vote to raise the debt ceiling and pass a balanced budget amendment, House Republican leaders said today.

The plan is unlikely to go anywhere, since a balanced budget amendment would likely fail in the Democrat-led Senate, but GOP leaders nevertheless called it a serious plan to raise the debt ceiling. They said President Obama and Democrats have failed to come up with an equally serious plan.

“We asked the president to lead,” House Speaker John Boehner said in a press conference today. “We asked him to put forward a plan — not a speech, a real plan — and he hasn’t. We will.”

The “cut, cap and balance” proposal would make raising the debt ceiling contingent on Congress sending a balanced budget amendment to the states. It would also cap government spending at 18 percent of Gross Domestic Product over the next 10 years.

The plan would raise the debt ceiling by $2.4 trillion, since that is the increase requested by the president. However, the plan would actually make even more in spending cuts — as much as $111 billion in 2012 alone.

[…]Boehner said the House would vote on the “cut, cap and balance” plan and then decide how to proceed from there.”I don’t want to preclude any chance of coming to an agreement, but [Democrats have] been unwilling to put a real plan on the table,” Boehner said. “Without serious spending cuts or real reform to entitlement programs, this problem is not going to be solved.”

That’s what the Republicans would do if they were in control. The balanced budget amendment would cap spending at 18% of GDP, so that we would never have a debt crisis ever again. That’s the right solution, except that the Democrats cannot give up the idea of buying votes with the money they steal from job creators. They just can control their addiction to spending.

Now, let’s take a look at who caused the debt crisis, with this House Budget Committee article by fiscal hawk Paul Ryan. (H/T Washington Post)

Excerpt:

While President Obama has recently professed a newfound — and vague — desire to cut government spending, it’s useful to recall what the President has actually done since taking office in 2009. The President signed into law a massive spending spree that plunged us deeper into debt, and failed to deliver on its promise to create jobs.

  • 24% Increase in Base Spending. Non-defense discretionary spending grew by 24% for the first two years of the Obama Administration, adding $734 billion in spending over the next 10 years.
  • Record Government Spending. The Federal government will spend $3.6 trillion this year, 24% of gross domestic product (GDP) and the highest burden on the economy since World War II. Spending has historically averaged a little over 20% of GDP.
  • President’s Budget Makes Matter Worse. According to CBO, the President’s budget never spends less than 23% of GDP and by the end of the decade rises to 24% of GDP. His budget’s failure to address the drivers of our debt threatens the health and retirement security of America’s seniors, and the economic security of all Americans. The President’s budget seeks to spend $46 trillion in government spending over the next decade, and has subsequently fought against House Republican efforts to restrain his spending appetite down to $43.5 trillion.

During the four years when Nancy Pelosi was the Speaker of the House, and Harry Reid was in control of the Senate, the Democrats packed 5.34 trillion dollars onto the national debt.