Full 50-State Green Retrofit Initiative

I ask my opponent to wait until Saturday to post his arguments, as I will not be able to access the internet from Thursday until then. -----Rebuttals----- R1: Stability "Guaranteeing banks get repaid for loans they give out threatens the integrity of the banking system and finances at large." The FDIC assures bank customers that they will have at least $150,000 of any money in the banks if their bank fails. So, assuring banks that they get repaid (reverse argument) wouldn't be harmful - it would actually make it more secure. My opponent also says that "there is not enough reward in the venture in order to justify banks taking the risk." This is wrong. There are reasons why the market in bank loans isn't working that well. Banks aren't sure that the customer own the building in 4 years or more. However, with assured loans that would cover a limited amount for the banks, that risk would be successfully hedged. Many building owners have too much debt to take out new loans, when in reality, they could afford them. As I said earlier, to pay off the loan, the rate is only slightly raised. Government just has to start up this initiative. A loan guarantee fund, banks would get the confidence to expand loans to many others, because the risk is low. Banks would not be afraid that too many people would sell the building, and the fear of overhanging debt, both of these risks would be hedged by this initial loan fund. The vast majority, if not all, customers involved would be able to afford the slightly higher energy rates, and enjoy the great savings following. This would lead to an economic and clean energy expansion. R2: Apples and Oranges A loan guarantee fund of $30 billion is of minimal size. To compare it, it is only about 0.8% of total federal government spending (my opponent's source). It is like crying that we should not spend $20 on a high yield stock, even though my montly income is $2500 (statistics aligned). This is not like other Solyndra or the Freddie Mac, subprime loans. This has much less risk. The far majority of people can afford a slightly higher energy bill, at least those who agreed to get a retrofit. Gov't sets up a $30 billion loan guarantee fund. Not more. However, because banks are now assured they will have guaranteed profits in some areas, they are willing to expand their operations and loan to other trustworthy customers, who will pay about the same rate until the bank profits, then the customer does. It is a matter of jumpstarting this market from the damage of the credit crunch. Here is another analogy. John pays the community college $220 a month (his parents cover the rest). However, the college offers to extend his simple 1 course and expand it to an Associate's Degree, and all John has to do (including the work and classes) is to pay $240 a month now. John will likely be able to afford it, because it is only a slight change on the price that he has already been paying, and he will gain much more over time. To conclude on this point, it is not like subprime loans. A subprime loan usually had someone would couldn't afford the property. A energy retrofit would have very low risk, because the energy rate would barely change, and they were paying a similar rate before the retrofit. R3: Profit for All Con misunderstood me. The Consumer takes out the loan from the bank. The consumer then pays the local contractor to perform the retrofit. Then, after the savings are realized, the bank is payed back its loan with interest, and the contractor gets the new wealth from the transaction. And the utility (if involved) gets the additional energy capacity to sell to other customers with lower costs. Suppose my electric bill is $250 each month. With the retrofit, the bill increases temporarily to $280. The retrofit costs $10,000. So, after the retrofit, if you factor in the average savings of 30-40% (we'll say 35% on average). [1] [2] So my bill's actual cost would be $162.50. So, the net overhang would be $117.5 over what the bill would actually be. Then, you factor in the net intest of 5% on the loan of $10,000 (500), and crunch the numbers. The end result is that I would fully pay off the bank loan plus interest of 5% in 7.5 years. Then, I benefit from a 35% drop in my electric bill, for the remainder of my days at the residence (or property I owned). The result is tens of thousands of savings. Using the earlier figures, with the $87.50 cheaper each month, and supposing I owned that property and used the same electric rates for 35 years, I would save over $36,000. Ultimately, it is a profit for all (those involved), and because many will act rationally, contractors will only perform a retrofit if they are sure the savings will be realized. Banks would do this. They need some confidence, which the common wealth can assure at a very small upfront cost. Once the banks have confidence, they would expand their lending to other customers as well as they see fit. Conclusion Eternal energy is the future. With an upfront fund, banks will have greater confidence to expand their loans to others, as the initial fund would hedge the risk of those who sell the property or cannot afford the small hike in prices. The risk is very low. The new energy rate would be very similar to the one before. Use the analogy I presented as proof of a profit for all, the customer, banker, and the contractor. Finally, the resolution would result in huge savings for the economy, allowing the economy to grow. Our air and water would be cleaner. And it would set America on a path for a more affordable energy as well as protecting our natural environment. The risk is extremely low remember, most can afford their energy bill. It is more expensive to forgo the $100 billion in savings annually than do nothing. [1] http://www.rockefellerfoundation.org... [2] Clinton, Bill. Back To Work. New York City: 2011. 145-151. Print.