Saturday, May 11, 2013

Government accounting vs. honest accounting

....can be seen in the recent news that Tesla Motors has scored a quarterly profit of eleven million dollars.  It sounds pretty good until you realize that the same company has received one time subsidies of $500 million, and ongoing subsidies of $7500/vehicle.  So if you consider a likely cost of borrowing that half billion bucks of at least 5%--or $25 million annually--and the per vehicle subsidies of $37 million for 4900 vehicles--and that $11 million profit is looking an awful lot like a loss of $32 million, or a loss of $6500 per vehicle. 

On the flip side, it looks like a pretty good return on investment for CEO Elon Musk's $35,800 donated to the Obama Victory Committee.  Not that there was any quid pro quo arrangement on this, no sirree.  You might as well argue that the IRS was targeting conservative groups for audits, or that high level State Department and White House testimony on the Benghazi debacle is hopelessly at odds with the testimony from those who were there.

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