Redirecting Capital from American Industry to Foreign-Owned Boondoggles
When money is invested in one project, it cannot be invested in another.
Liberals know that Americans are opposed to government-to-government foreign aid programs. They also know that most Americans support exports, even government-funded exports. This "helps American business."
So, they vote for projects that are disguised foreign aid. They create government guarantees for private investments in foreign projects. The money is lent in dollars. So, the dollars must be spent in the USA. It's welfare for crony capitalism. First, it's welfare for big-money investors. If the projects were really profitable, they would not need government-guaranteed loans to fund them. Second, it's welfare for the businesses that will sell the goods. Who pays? American consumers who won't get the benefits of American production. The goods will be removed from the USA. Americans will not be able to buy them and use them.
Here is a classic example. It was sponsored by Senator Hillary Clinton.
The U.S. government plans to spend $20 million to “help clean energy projects in Africa get started.” There will be wind farms. There will be solar panels.
Hillary Clinton has described the program this way.
“The U.S.-Africa Clean Energy Finance Initiative will help clean energy projects in Africa get started. This is an innovative partnership between three United States government entities – the State Department, OPIC (the Overseas Private Investment Corporation), and the U.S. Trade and Development Agency. We want to drive private sector investment into the energy sector.”
This is jump-starting hundreds of millions of dollars of private investment, she has promised. The money will come from OPIC: the Overseas Private Investment Corporation.
This private investment will be backed up by U.S. taxpayer guarantees. As it states on its Web site, “OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.”
This system of government guarantees is mandatory, Clinton says. Why? Because “investors in this space often see obstacles and risks that stop them from investing in clean energy in Africa. … So if we can remove some of the risk and cover some of the costs of preparing a project, we believe we can spur significant new private investments in clean energy. And that is the idea behind the partnership we are announcing today.”
Money will flow to Africa that would have flowed into American industry.
Here is our supposed problem. An investor who “wants to build a wind farm in Egypt but won’t commit until he sees assessments and land surveys. A grant could cover the cost and mean the difference between going forward or giving up.”
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Published on July 10, 2012. The original is here.