Thursday, September 8, 2011

Solyndra and Green Energy

Solyndra was to be an Obama showcase high-tech job creating green energy business.  Well the company filed for bankruptcy.  Another failure in the use of "incentives".  Today the Washington Post ran this article: FBI searches shuttered Solyndra offices, plant in California.  According to the Washington Post, Solyndra is "leaving taxpayers on the hook for a $535 million government-backed loan".

Below is the comment that I left concerning the appropriate approach for encourageing green energy in a free-market environment.  I will acknowledge that my proposal does not fully conform to my assertion that taxation should be limited to funding government operations, not for economic manipulation.  The distinction that I will draw is that increased taxation will continue to fund government operations and encourage entrepreneurs to create these businesses when the economics are there.
"The "correct" solution would be to make traditional energy sources more expensive through taxation. That would nudge people into green energy and would help to reduce the debt.

Alas the "Bread and Circuses" approach that buys votes is to give tax credits and other incentives. This encourages the establishment of businesses that are unsustainable once the subsidies go away, they increase the national debt, they invite fraud, and place liability on the taxpaying public."

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