[I urge readers to stick their head in a vise before reading this.]
I have previously discussed the non-job-creating $50 billion in nuclear loan guarantees the Senate put into the stimulus (see here). For the record it was Sen. Robert Bennett (R-Utah), which I point out merely because "R-Utah" perfectly describes thinking behind this farce.
Not only won't these loans generate any jobs in Obama's first term, but as Peter Bradford, former member of the Nuclear Regulatory Commission, explained to me, it could actually kill jobs. How?
The capital markets are not swimming in credit. If you have billions in taxpayer backed loans for your project, even for a project that will take years to finalize and see actual jobs, you may well suck up money that might be otherwise be available for, say, wind projects that are shovel ready now. Bradford called the nuke loans "straw ready."
Worse, utilities that actually use these loans to build a nuclear plant would face an all but certain drop in their credit rating -- see here. That means we are setting ourselves up to take over more trouble assets, since the Congressional Budget Office estimates the likely default rate of these loans at over 50 percent. If you liked nationalizing banks and insurance companies, you'll love nationalizing nuclear utilities!
But here is where it gets particularly farcical: The loans only got snuck into the bill by budget gimmickry that replicates the high-leverage, fraudulent risk analysis that got us into the subprime mortgage and credit default swap mess. Some leading nuclear energy experts explained this to me Tuesday, and I will do my best to explain it to you.