Full 50-State Green Retrofit Initiative

I am going to post my arguments against the policies outlined in the Resolution, then I am going to refute my opponent's arguments in the following round.I would also like to ask my opponent to wait as long as possible before posting the next argument as I will be out of town until Friday morning at college orientation and will not be able to debate until then.P1. Loan Guarantees Are Bad Financial PolicyGuaranteeing banks get repaid for loans they give out threatens the integrity of the banking system and finances at large. The investment world is based off of the system of risk vs. reward. The reason why these environmental policies need a loan guarantee program to begin with is because there is not enough reward in the venture in order to justify banks taking the risk. This has forced the government to want to implement these loan guarantees so that banks are more inclined to loan to green projects than they normally would be.Already, we see an unnatural influence on the loan market. In guaranteeing loans are paid back by the government banks will now make loans they normally would not. Sound familiar? These same practices are similar to the ones that caused the housing collapse in 2008. If a bank would not normally loan money to a company looking for a green retrofit, why should they be given a loan guarantee? I don't want to refute my opponent's arguments this round but he claims there will eventually be a payoff. But if a bank is not willing to make the loan without a guarantee then obviously they don't see the integrity of the pay off. This could lead to a financial mess.i. Bad LoansIf a bank is guaranteed their money back no matter how the loan ends up, what prevents them from making bad loans? For example, the energy scandal surrounding the company Solyndra where over $500,000,000 was lost came from a loan guarantee program. [1] The bank didn't see the risk involved since their assets were guaranteed by the government. Loan guarantee programs only support risky investment habits, they also undermine the foundation of the financial system by taking the risk out of the equation.ii. Financial NonsenseMy opponent claims that all parties involved in green retrofits can benefit from the program but I don't see how that's possible. We have the government, the banks and the companies involved. Now, if a company goes bust on a green loan or goes bust before the loan can be paid back (such as the case with Solyndra), the government is forced to pay the loan and is out all the money. They lose. If the company succeeds in the retrofit, they have to pay the bank huge amounts of interest and loses out on money wise. Even at a low interest rate of 5% the payout from green energy retrofits won't be able to turn the company a profit and they will lose out (which is why companies don't retrofit on their own, they have to be enticed). In this situation, the company takes all the risk along with the governments and the banks get off spot free. This is not a sound way to run a financial system. By taking all responsibility off of the banks you are endangering the entire system. Banks loaning out money they are guaranteed back might even entice them to make loans they don't have or invest in places they know to be unsafe.These very practices and habits coming out of this proposed loan guarantee program were the same ones that caused the financial meltdown in 2008. [2] iii. Government DebtOur government is not in a position to guarantee potential millions or even billions to banks and companies. Our debt is over $15.8 TRILLION and we run trillion dollar deficits every year. [3] Our government is not in a position to risk throwing millions away on projects like this. It only takes one company such as Solyndra to sink the entire program and that is something we can't risk right now. Our government's finances are in the tank and you're suggesting they risk more money on a long term, low reward, high risk environmental ploy. It's not feasible. It's not logical. Not given the country's current financial situation.This debate is about whether or not the government should guarantee banks their money back for green energy retrofit loans. Why stop there? Why don't we just let the government guarantee every penny ever loaned out? That's because that would cause a financial crisis. Why is green energy special? I'm not guaranteed government money if I loan my friend some money, why do they get special treatment? Green energy is a high risk, low reward business. Guaranteeing loans is bad for the financial system.The government is not in a financial position to take on investment risks, especially one in low demand and high risk situations.We should not implement a government guarantee loan program for green energy retrofits. [1] http://www.factcheck.org...[2] http://online.wsj.com...[3] http://www.usdebtclock.org...