It Could Happen Here

by William Yeatman on October 25, 2010

in Blog

In 2007, the Spanish government of Prime Minister Jose Luis Rodriguez Zapatero passed a law that guaranteed solar power producers a price for power more than 10 times the 2007 average wholesale price paid to conventional energy suppliers. The generous subsidies sparked a rush to solar, and taxpayer costs mounted. Today, the government owes $172 billion to renewable energy investors, but it doesn’t have the means to meet its obligations in the face of rising budget deficits. As a result, more than 50,000 other Spanish solar entrepreneurs face financial disaster.

The White House revised its long term budget outlook yesterday, but not in a good way-President Barack Obama tacked another $2 trillion onto America’s tab (to China). Two days ago, the U.S. taxpayer was projected to owe “only” $7 trillion (to China) through 2020; now, it’s $9 trillion.

But wait! There’s more! America’s dismal deficit is even worse than Obama is willing to admit.

Yesterday Reuters reported that Obama’s budget predictions include more than $600 billion in revenues raised from a cap-and-trade energy rationing scheme to fight so-called “global warming.” That’s a problem, because the House of Representatives in June passed a climate bill that gives away 85% of the cap-and-trade revenue that the White House was counting on in its new and unimproved budget.

So it looks as if the Obama administration needs to further revise the deficit.