Hilary and coal mining

[spence]

Originally Posted by Fly Rod

Spence this contradicts U:

http://www.forbes.com/sites#/sites/t.../#d18274c576c4

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.

[detbuch]

Originally Posted by spence

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.

This socialist trajectory is transitioning from disaster to comedy. The socialists have had field days attacking the evil profiteering of companies like Bane Capital, but are all in for the federal government being their venture capitalist. Apparently, capitalism is bad only in the privater sector.

Really, Spence, do you want the taxpayer being made to gamble? Is it your dream that big government should not only squeeze us out of a nation of shopkeepers (the so-called middle class) into a big business/big government oligarchy, but should become big business itself?