Tag Archives: Waste

News

The US postal service and Amtrak: which one will go bankrupt first?

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Will it be the USPS? (H/T Wes)

Excerpt:

Inspector general David Williams says cash-strapped service, saddled with debt and low revenues, is in ‘very serious trouble’.

The chief postal watchdog has warned that the troubled US Postal Service will go out of business this year unless Congress acts to rescue it.

David Williams, the inspector general of the USPS, says the service is in “very serious trouble”, after five years lumbered with heavy debt and falling revenues.

In an interview with the Guardian, Williams warns that Congress, which has been distracted by November’s elections and the fiscal cliff crisis, must act this year to save the service.

The USPS lost over $16bn last year, and has lost about $41bn over the past five years, according to Robert Taub, a vice-chairman of the Postal Regulatory Commission.

Or will it be Amtrak?

Excerpt:

Amtrak triumphantly proclaimed 2012 to be a success. The reason? It posted a loss of only $361 million for the year. That’s its smallest operating loss since 1975, amid growing ridership along the Northeast Corridor between Washington and Boston. Although this represents progress in the right direction, Amtrak is still not worth what it costs American taxpayers.

Amtrak has never been profitable. From its outset in 1971, it has been backed by taxpayers with billions of dollars in direct aid and loans. Over the past three years alone, Amtrak has received more than $4.4 billion in federal aid, and it still was not able to finish any of those years in the black.

[…]But after more than 40 years of government funding, $4.4 billion in aid over the past three years should be particularly disconcerting. Rail transportation is not becoming cheaper because of government investment in the market; to the contrary, the price has gone up, especially as compared with other major public works projects.

[…]Rather than successfully spurring on American business, Amtrak provides slower trains at higher prices. It is a symbol of government waste because it fails to make any progress toward self-sufficiency and fails to innovate.

It is time to admit this train has left the station. Amtrak cannot and will not be run efficiently with the backstop of government funding behind it. Someday, a public-private partnership on railroads could be in the American interest, as it has been in the past. But for Amtrak, the government should shut off the spigot.

Or will Obama just borrow a few more trillion from your children, so that his public sector supporters in USPS and Amtrak can continue to vote for socialism?

The funny thing about this is that we could sell these wasteful government-owned organizations and privatize their functions. Then we wouldn’t have to sink more and more taxpayer money in public sector boondoggles.

News

How much did taxpayers lose in Obama’s GM bailout?

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Investors Business Daily does the math on the GM bailout.

Excerpt:

Sale of the U.S. government’s stake in General Motors Corp. ends a sorry saga. Not only were Americans lied to about the costs, but the bailout underscores why replacing market forces with federal bailouts doesn’t work.

The Obama administration says it will unload 200 million shares — or about 40% of its holdings — back to GM right away. The rest, 300 million shares, are to be sold by March 2014.

[…]Well, GM on Wednesday said it will buy back the 200 million share government stake for $5.5 billion, or $27.50 a share.

The break-even point on the government’s total holdings was $53 a share. But now, with $20.9 billion in taxpayer funds left to pay off from 300 million shares, the break-even point has risen to $69.72 a share.

In other words, at current prices, taxpayers are sitting with a loss of 61%, or nearly $15 billion, on their investment.

So where did the money go, then?

According to a study last summer by the Heritage Foundation, the $80 billion auto bailout gave the UAW and its members nearly $27 billion due to the fact that GM couldn’t shed its outrageously expensive labor contracts, something it could have done in a normal bankruptcy.

As such, Obama didn’t bail out the auto industry; he bailed out the unions. Without the unions’ added costs, taxpayers would have owed nothing.

It’s not hard to see how this happened. The UAW and its affiliates give tens of millions of dollars each election cycle, almost entirely to Democrats.

This union influence explains why Obama’s auto czars, Steve Rattner and Ron Bloom, arranged a government bankruptcy for GM that flew in the face of hundreds of years of bankruptcy law and violated investor rights.

Bondholders took huge losses, while unions got a big chunk of ownership in GM stock that they weren’t legally entitled to.

In a shocking display of favoritism and blatant unfairness, GM’s union workers kept their pensions, while nonunion workers at GM spin-off Delphi lost theirs.

Those unions paid Obama back by working hard to get him re-elected. That’s how socialism works.

News

New e-mails reveal that White House pressured Department of Energy to make loans

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From the Washington Examiner.

Excerpt:

Previously undisclosed emails made public today by the House Oversight and Government Reform Committee describe multiple instances of White House pressure on career Department of Energy officials to speed up approval of government loans to clean energy firms like Solyndra and Abound Solar.

President Obama is described in one of the emails as having personally approved “moving it ahead,” thus reversing a prior decision by DOE career officials not to extend $2 billion in tax-funded help to AREVA, a French nuclear power company, on an Idaho project.

Vice-President Joe Biden is described in other emails as exerting heavy pressure to gain approval of a $1.3 billion wind farm project at Shepherd’s Flat, Oregon.

The new emails contradict claims by Obama and others in his administration that all decisions on the $20 billion DOE clean energy loans were made by career executives in the department.

[…][A]n Oct. 30, 2010, email from Jim McCrea, a credit advisor to the energy loan program, to Jonathan Silver, the program’s executive director, described his worries about pressure from the White House to use a “fast-track process” to approve loans.

“I am growing increasingly worried about a fast track process imposed on us at the POTUS [President of the United States] level based on this chaotic process that we are undergoing … by designing the fast track process and having it approved at the POTUS level (which is an absolute waste of his time!) it legitimizes every element and it becomes embedded like the 55% recovery rate which also was imposed by POTUS,” McCrea said.

In another email made public today by the House panel, Silver instructed McCrea to tell a Treasury Department official of White House support for DOE help to Abound Solar.

“You better let him know that WH wants to move Abound forward. Policy will have to wait unless they have a specific policy problem with abound,” Silver said in the June 25, 2010, email.

Abound Solar is a Colorado-based solar panel manufacturer that had used $68 million of a $400 million DOE loan guarantee before filing for bankruptcy earlier this year.

You can a list of most of the green energy failures and the details of their Department of Energy loans here from Heritage Action.

Here’s a snip:

Thanks to analysts at The Heritage Foundation, a list has been compiled of 12 “green” energy companies which received Department of Energy (DOE) loan guarantees but are now bankrupt:

  1. “Abound Solar (Loveland, Colorado), manufacturer of thin film photovoltaic modules.
  2. Beacon Power (Tyngsborough, Massachusetts), designed and developed advanced products and services to support stable, reliable and efficient electricity grid operation.
  3. Ener1 (Indianapolis, Indiana), built compact lithium-ion-powered battery solutions for hybrid and electric cars.
  4. Energy Conversion Devices (Rochester Hills, Michigan/Auburn Hills, Michigan), manufacturer of flexible thin film photovoltaic (PV) technology and a producer of batteries and other renewable energy-related products.
  5. Evergreen Solar, Inc. (Marlborough, Massachusetts), manufactured and installed solar panels.
  6. Mountain Plaza, Inc. (Dandridge, Tennessee), designed and implemented “truck-stop electrification” technology.
  7. Olsen’s Crop Service and Olsens Mills Acquisition Co. (Berlin, Wisconsin), a private company producing ethanol.
  8. Range Fuels (Soperton, Georgia), tried to develop a technology that converted biomass into ethanol without the use of enzymes.
  9. Raser Technologies (Provo, Utah), geothermal power plants and technology licensing.
  10. Solyndra (Fremont, California), manufacturer of cylindrical panels of thin-film solar cells.
  11. Spectrawatt (Hopewell, New York), solar cell manufacturer.
  12. Thompson River Power LLC (Wayzata, Minnesota), designed and developed advanced products and services to support stable, reliable and efficient electricity grid operation.”

This is what the Obama adminstration means by “stimulus” and “shovel-ready” projects. This was their strategy to create jobs by spending taxpayer money and borrowing money from your children.