Tesla illustrates the problem with government loans

05/30/2013 | Slate

Tesla is a runaway success story, but that only goes to show the problem with the U.S. government's willingness to extend cushy loans to risky companies, writes Scott Woolley. Venture capitalists demand payback, but the federal government doesn't capitalize on the leverage it has with its loan programs. "The government made the key mistake of loaning money to Tesla without insisting on receiving stock options, options that could have allowed the Department of Energy to pay for the Solyndra losses several times over," Woolley writes.

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