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Originally Posted by Fly Rod
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No it doesn't. The author is just arguing that as these loans have a very low interest rate there are other investments the government could make that would -- if successful -- net a higher return.
For instance if you want to understand the net present value of an investment, you discount the cash flow based on a hurdle rate, say 18%. i.e. you don't get to claim returns that would have otherwise been guaranteed.
The author is glossing over two things I think 1) that the Bush program wasn't ever intended to make an economic profit and 2) the equation here is only looking at money out and money in, he's ignoring all the other benefits like job creation, technology innovation etc...which is the entire purpose for the plan.
The political point though -- how taxpayer resources should be used in regards to risk/return -- is perfectly valid.