T Nation

A Better Way to Spend One Trillion


#1

We just spent close to 1 trillion dollars for round 2 of trying to get us out of this mess. I have no idea what 'tangible' outcome will result in this stimulus, but I think I found a better way to spend 1 trillion.

If there are 100 million homes in the US..take 1/2. Thats 50 million.

If it costs on average, to covert a house to solar energy for ELECTRIC only, $15,000 ( not sure of exact numbers, but I think for this conversion its pretty close).

The Govt. can offer a home owner 2 options. Fully subsidizing conversion where the home owner receives 'free' electric, buy any surplus goes back to the Govt.

Second option is, the homeowner pays 1/2 the cost, gets the conversion done and starts reaping the benefits of selling back surplus.

Both options still have the homeowner getting the electric for free.

Other conversions on the home can also be done. Swapping out gas the heat for a new 'ceramic' heating element powered by electric. New effecient windows can replace older, wooden ones. All at govt cost or the owner paying 1/2.

The math of 50 million x 15,000 is 750 billion. You now have 250 billion to start infrastructre, where lets say, the car assembly lines can be replaced with making solar panels and components. New electric cars can be made. If you only convert 25 million homes, then you have 500 billion for infrastructure.

The construction sector would now get a boost as these workers are now part of the conversion project efforts.

New grid upgrades, holding stations, etc. would need to be worked on, making more work. Also, R and D on solar panels would make them more effcient, smaller, etc.

Big oil would either have to buy in or not ( yes, HUGE lobby that the PEOPLE would have to fight). If they don't, then gas/oil consumption would start to decrease. BUT, since there would be more supply than demand, refineries would have to invest in ways to make money on different fuel types. Diesel and jet fuel costs, based on more supply than demand, would go down. Transportation costs would go down, and then the cost of goods would go down ( yeah, I know this one never works since I have not seen the cost of milk or other goods go down when the oil prices fell, but hey, I can dream).

Best thing is, the home owner would be saving on their electric bill, and can use that money to pay bills, mortgages, go on vacation, buy things.

The govt can begin to use the excess energy to first cut costs on govt buildings, other homes that are not fortunate to be able to use solar, etc.

Also, once the nation becomes a big solar panel, we could then sell energy to other countries.

I just cannot imagine that big ole Sun being under utilized in this day and age.

I know there are lots of holes in this one so help me out.

Why can't this be done ? I think we NEED to really step up to the plate on alternate energy sources and use money for projects like this instead of feeding the sharks.


#2

If all homes, or 50% of them, were economically advantageous to convert to solar THIS WOULD BE BEING DONE BY FREE-MARKET FORCES.

The reason it is not, is because it is uneconomic.

Which means that the return is not as much as what is put in.


#3

[quote]Bill Roberts wrote:
The reason it is not, is because it is uneconomic.

Which means that the return is not as much as what is put in.[/quote]

Hence the GOVT spending OUR tax dollars on US.

There is 100 percent return when fully subsidized since the homeowner has not spent a dime.

The cost issue is moot since the 1 trillion is spent ON US…not FOR US.


#4

(Sigh)


#5

[quote]Bill Roberts wrote:
(Sigh)[/quote]

Yeah, just have the ole’ government pay for it. That makes it free.


#6

Bill…help me out !

I cannot comprehend why cost is the hurdle. Wouldn’t costs go down if we invest in the technology ?

Why is it computers, TV’s DVD players, etc. continue to drop in cost as the units get better ? I would think the same would happen for solar or any other alternate energy form, if we invest in it.

My entire point is that we continue to spend trillions on what is called stimulus packages, and homeowners continue to struggle and not reap any REAL benefits, what is the point ?

I have a friend here at work who converted years ago, and has now passed the point where he has recouped his investment by the savings on electric each month, and is now selling his excess back to the electric company.

Maybe it’s too simple ?


#7

[quote]DoubleDuce wrote:

Yeah, just have the ole’ government pay for it. That makes it free.[/quote]

Well WTF is the govt paying for now cause I ain’t getting any of it in terms of it being sustainable.

Fuck my tax cut…help me convert my house…I will pay 1/2. I would rather pay for that now and start reaping some benefits and help move this country into a new form of energy then to get another 15 bucks in my pay check and have my son and his son and his son’s son pay for that decades down the line.

I guess once Summer rolls on in, the alternate energy cry will once again be heard since gas prices will be up to $4 again.

Much more cost effective to run the cars, planes, etc. when oil is cheap. Yup…that’s the answer.


#8

[quote]therover wrote:
Bill…help me out !

I cannot comprehend why cost is the hurdle. Wouldn’t costs go down if we invest in the technology ?

Why is it computers, TV’s DVD players, etc. continue to drop in cost as the units get better ? I would think the same would happen for solar or any other alternate energy form, if we invest in it.

My entire point is that we continue to spend trillions on what is called stimulus packages, and homeowners continue to struggle and not reap any REAL benefits, what is the point ?

I have a friend here at work who converted years ago, and has now passed the point where he has recouped his investment by the savings on electric each month, and is now selling his excess back to the electric company.

Maybe it’s too simple ? [/quote]

Maybe what is too simple?

Not all houses are in the same conditions.

There ARE houses where it is economic to make the conversion with current technology. Market forces result in these conversions being done.

There are also houses – most of them in the country – where it is NOT economic. More resources go into the conversions than will be saved by the conversions.

These conversions, if done, result in LESS wealth.

The free market results in, generally, decisions being made that increase wealth. Therefore those houses where it is economic, you don’t need the government to order conversions or pay for them.

And those houses where it is uneconomic, it burns resources, flushes them down the toilet, to have it done anyway because “the government knows best” or “the government (really the taxpayer) is paying for it anyway.”

As for costs potentially coming down, sure.

Maybe at some future point, even near future, it will be economic for most houses to have solar roofs.

But you know what? When that is the case, the free market will yield that: there will be no need for the government (read, the taxpayer) to pay for it.


#9

Actually I need to make a correction:

In at least some cases and I suspect many, while solar conversion may appear economic to the homeowner, in fact it is not. In fact, the value of the electricity produced does not come close to the value that went into the conversion, and wealth is lost via the conversion.

For example this is true in Gainesville, FL. The city (or county, I don’t recall) has come up with a plan where homeowners will be paid far more than the going rate for electricity sold to the system.

Not just far more than the what it costs the utility to produce electricity by other means, but also far more than the retail cost to other consumers.

So it LOOKS to the homeowner as if his system is paying for itself.

But in fact, it is not. The other citizens are having to foot the losses.

However, in principle it may well be that someday a cheap, thin film will be all that is needed to do the job. And when that happens, people will of themselves do the conversions.


#10

[quote]therover wrote:
Hence the GOVT spending MY tax dollars on BULLSHIT.
[/quote]

Fixed it.


#11

Lifti…I just read your response and all I could see is the guy on SNL shouting out ‘FIX IT !’ Thanks !

Maybe the ‘market forces’ are bullshit too.

Is it possible that the benefits do not out weight the costs due to market force bullshit ?

The govt and market forces can never work together huh ?

Maybe my example was not a good one when suggesting solar energy.

My main objective was to try to rationalize a way to invest in some form of alternate energy, helped by funding from the govt’, where people can be put to work ( doesn’t the govt fund road projects ? ), where a new energy infrastructure can be made, where at some point there is enough output that the entire nation has a more cost effective way of servicing their homes and transportation, instead of spending it on as Lifti so eloquently put it…

BULLSHIT.


#12

the gov’t will already pay for a third.

My state will pay 2.25 per kW.

Total cost for my home would be $52k. This would cover almost 100% of my power consumption. No surplus. Break even point on this is 50years. not a very good investment. you think the components will last that long? Never get your money back.

With all the credits, it’s still $16kfor my house. Still about a 20 year payback. not a good investment.

I am going to do it anyway, but not for financial reasons.

http://www.affordable-solar.com/gt-estimator.htm

Putting math aside, this is a terrible idea economically speaking.


#13

Why don’t we just buy lots of condoms for everyone?


#14

I did a project on solar energy home conversion in college, we looked at all the available cells at the time (this was a few years back). The best we could come up with was about a 25 year payback period with a 20 year lifespan on the cells.

Bills point is that, currently, converting to solar power actually reduces wealth (as a lot of green technologies do). That also wouldn’t include the inefficiencies associated with channeling money through a bureaucracy (which probably reduce wealth by 50 cents on the dollar or more). It would be better to not take the money from the home owners in the first place so they could pay the power company.


#15

[quote]therover wrote:
Lifti…I just read your response and all I could see is the guy on SNL shouting out ‘FIX IT !’ Thanks !

Maybe the ‘market forces’ are bullshit too.

Is it possible that the benefits do not out weight the costs due to market force bullshit ?

The govt and market forces can never work together huh ?

Maybe my example was not a good one when suggesting solar energy.

My main objective was to try to rationalize a way to invest in some form of alternate energy, helped by funding from the govt’, where people can be put to work ( doesn’t the govt fund road projects ? ), where a new energy infrastructure can be made, where at some point there is enough output that the entire nation has a more cost effective way of servicing their homes and transportation, instead of spending it on as Lifti so eloquently put it…

BULLSHIT.[/quote]

But why does one group have a right to put a gun to an other group’s head to force them to fund it?

If it were so good for us why wouldn’t we be of capable of doing it for ourselves?

I don’t care what it is: health care, environment, education, welfare…these are goods that must be provided by the market it is the market that will decide if they are valued or not.


#16

I guess the cost of converting is more than what I estimated ( based on reading about solar energy). It’s also based on the current technology and effectiveness of the cells. Not sure how much my friend paid to convert ( I will have to ask him) but having a zero electric bill and selling energy back to the company sounds good to me.

It seems that since there really hasn’t been any real R and D to try and develop more efficient cells and to produce more kilowatts per cell, are we stuck without an alternative energy source based on what the free market dictates ?

For me, I seriously have to think about investigating what it would take for me to convert.

Can any one correct me on this one…wasn’t there at some point govt help ( either in tax credits or whatever, for people who convert ? ). I had thought at one time contractors doing the conversions were getting help. If so, and the funding dried up, cant it be explored as to getting dollars back into that effort ?

I mean shoot…1 more additional trillion is going to be spent and for me, I don’t think it’s going to do much. Banks are still not lending like they should, more and more people are getting laid off or taking pay cuts.

Forgive my rant guys n gals. Just trying to think out of the box on what can be done with some of this money to move forward instead of just trying to stop the bleeding.


#17

therover: It comes down to this - Shit doesn’t just “get better” because you throw money at it.

There are innovations. Capitalists (read: rich folk) look at these innovations and decide to fund some of their production. The ones that make money (read: the good ones) continue on in newer version across the board.

DVD is a format we use because a rich guy thought it’d do better, funded it, and was right. The guy who funded the 8-track? Yeah, hes a bit down on his luck.

Blu-ray is currently doing better than HDTV, not because we threw money at it, but because it MAKES more money. Throwing more money to “invest” in HD DVD will NOT, I repeat, NOT make it a better format.

Innovation is NOT a function of how much money you invest. PRODUCTION is a function of how much you invest. Investing in solar just means more solar. It doesn’t make solar any better.


#18

Beowolf:

I understand. Great points. I guess what I am trying to say is that ‘investing’ in an alternate form of energy behooves us as a nation. ( reason for the quotes is that I am using the term investing as more than just funding).

The govt throwing trillions of dollars at this mess we are in to me is not producing any tangible and sustainable results. Just more…as Lifti would say…bullshit.

We have become a reactionary nation…we are not proactive and certainly not creative when it comes to alternative energy. At least not to the point of really ‘investing’ in it.

Are we so locked into oil that it is now not feasible to find other ways ?


#19

[quote]Beowolf wrote:
therover: It comes down to this - Shit doesn’t just “get better” because you throw money at it. [/quote]

Bingo!

Yeah, right! And I suppose you believe Microsoft never threw money at ISO, that Zenith/GE was superior to the Crosby system, and that MP3 is superior to OGG Vorbis?

Blu-ray did better than HD-DVD because the major studios backed it up (you don’t know what deals were floated behind the scenes), and because of Sony’s aggressive pricing of the PS3 (each unit was lost at a $200 loss).

Each camp had big interests in his format winning, and in this particular case, the camp with the biggest wallet won.

Fair enough. But I have to agree with the OP that investing the trillion into solar energy remains a far better alternative (check out the thread’s title) than what the US government has been doing thus far.

What’s striking is the blatant hypocrisy surrounding this crisis. Everytime a third world country had a financial crisis, Washington (through the IMF & co) would preconise privatization, tightening the belt, raising interest rates, etc. When “the West” is touched by a crisis, they start pulling money out of thin air, making taxpayers rescue sinking corporations, etc. The double standard is so obvious that no outside observer could miss it.


#20

[quote]therover wrote:
We just spent close to 1 trillion dollars for round 2 of trying to get us out of this mess. I have no idea what ‘tangible’ outcome will result in this stimulus, but I think I found a better way to spend 1 trillion.

[/quote]

A better way to use the money would be to simply conquer our creditors. Use the trillion for a massive weapons upgrade and conquer all those countries to which we owe money. Problem solved.

We could train and station illegal aliens (mostly from Mexico) in the conquered countries, from whom we could extract tribute, so no more deficits either. No more illegals and they’d be put to productive labour.

Sounds like a plan to me.