Developing Solar Energy

We have the possibility of growing our economy at a phenomenal pace if we are to have inexpensive, renewable energy for all.  Energy drives the economy.  If it is plentiful, and inexpensive as it was in the early days of the US, you can make anything you want.  Energy is basically an infrastructure, electric companies are highly regulated, energy is the foundation of an economy.  Thus it is the business of government.  Solyndra proved that the free economy the investment by the free market is not up to the task of developing solar energy.  The development costs are too high, the payback too long. 

Here is a proposal for the government to float bond issues and pay back both the private investors and the government as an investor to develop solar energy at a pace that is reasonable ant that will drive the economy forward, stimulating innovation even further.

The Chinese government is spending not billions but trillions on solar energy.  They have to, they have terrible pollution that affects everyone, rich, poor, high government officials and everyone else, that is a problem they need to solve.  They appear to be printing money to do that, they do not care if their companies go bankrupt, they just prop them up and keep going.  We do not need to do that, but maybe there are things we could do.

Let me suggest that the US undertakes a similar project, growing government within the context of the free enterprise system.  The government would issue bonds that it buys and that private investors buy to create the trillions needed to develop solar energy.  Growing the tax base without raising taxes would be one benefit of this strategy.  Inside a company it is always possible to cut costs (what all the Republicans seek to do with our government) or grow revenue.  I have not heard much about growing revenue for the government except to raise taxes.   But if you think of the government that way, that taxes send money, you have the impasses we now have between  Democrats and Republicans. 

But taxes do not need to be the only way the government gets money.  And we do not need socialism.   The US government could stimulate private enterprise and do some revenue sharing, act as a partner in developing solar and wind energy in the the way many enterprises do.  When the US government is perceived as and acts as an enterprise entity by issuing bonds for a specific project, you get more options.  The government now is just another enterprise, one with a tax base,  Think of the government as a big enterprise, it has taxpayers and responsibilities: infrastructure, military, education, roads and airplanes.   If we expand the definition of the government, we get more options, more revenue for the base functions  

People until now have thought that the only way for the government to get more money is to raise taxes, but what if, what if there was another way to grow the revenue base of government using bonds that are sold to the government and to private investors for the particular very risky purpose of expanding solar energy, meeting the plan of making our energy infrastructure 50% renewable within a short time,   Think of it as an enterprise that could make money the way Google does. or IBM does, etc., but the investment is done as a democracy would do it, for the purpose of building out infrastructure, for the purpose of stimulating the entire economy   Teh energy companies could participate int he industry by buying bonds in the same way anyone else could do.
 
What if we were to look at global warming and renewable energy as an opportunity to make money for the US government.  What if  the US government were to figure out a way to make money by taking the multitude of renewable energy proposals and farming them out to US industrial research organizations with some incentive to jointly build some better technology, using the bond issue funds to support government funding, but with revenue sharing that helps both the enterprise and the government.   What if new partnerships were negotiated?   Is this feasible?  Is this a way for the government to print money in a constructive manner that helps the economy?

This is an interesting thought. Of course there would be huge challenges in avoiding bureaucratic bloat and inflexibility, but this is the reason to spend the government issued bond funds within the existing enterprise research organizations, not within the government . Politicians and unions would fight to tie such a project in knots. The project needs to be a skunkworks led by existing industry innovation centers, not a typical government bureaucracy.
Just because it is government money, it does not mean the government has the right to spend it, more like the military funding that goes to the enterprises who specialize in building military equipment, so also the DoD could control the funding for solar energy buildout.
 
And if such a venture came up with disruptive business plans, or even competitive operations, existing firms would scream and moan, but they could also be the ones to benefit the most.  With careful thought, rigorous independence, and the right leadership, it could be a really interesting operation. Maybe there could be a venture capital group that would fund startups and then exit via public offerings. Perhaps the firm could start with one capital infusion from the government, and then be allowed to live or die. It would keep its profits for a period of years to self fund its own development. The structure and culture of the enterprise would be crucial. Independence, flexibility, the ability to act quickly- to shut down failures and to make decisions- would have to be very different from any existing government operation. Frankly, the obstacles to success are so overwhelming, it might be impossible for this to succeed. It is a very interesting idea.
The truth is, business does not generally support government participation in what is otherwise a commercial undertaking. The reason to issue government bonds is that the trillions needed to develop solar energy do not exist anywhere else.  There is a reason free markets work, and work more efficiently than managed economies, so this project could not in any manner be run as a managed economy. In a large society with millions of producers and buyers and ever shifting tastes and demands, there is no way to efficiently plan centrally. Also, without a profit motive and risk/reward there is no innovation, again the reason government bonds are needed to stimulate investment in solar energy.  You may notice that the US is the center of innovation in the world, in so many industries. There is a reason for that. Let the government do the things it does best and leave commerce to private enterprise.  If the project were designed in this context, it might provide more funding for the government once the project succeeded and a more vigorous US economy because energy would be less expensive.