Department Of Energy Loans That Work

by Stuart Shapiro

During President Obama’s first term, Solyndra was the big scandal (ah those were the days).  Solyndra received a loan from the Department of Energy and subsequently went bankrupt.  Obama’s critics used this to show that the stimulus package was corrupt and wasteful.  These critics ignored that when you make loans, some work out, and some don’t.  Now we have news on a big one that worked.

Electric automaker Tesla Motors just announced that it has paid back the nearly half a billion dollars the Department of Energy lent it in 2010. According to a company press release, today’s wire transfer of $451.8 million dollars follows two other payments in the last year and a half. U.S. taxpayers could see a $12 million profit, in addition to a thriving company employing thousands.

The loan was offered in 2009 through the Department of Energy’s Advanced Technology Vehicle Manufacturing Loan Program, which began during the Bush Administration in 2007 and was funded in 2008. The program has resulted in $34.4 billion in loans and the creation of roughly 60,000 jobs.

Keep this in mind when Republicans scream “scandal.”  There is often a lot more to the story.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.