Post by phillip on Jul 25, 2020 10:13:18 GMT
I knew this "program" would be a flop the minute Trump fired the guy who was leading the oversight and claimed he would be the oversight. Because Trump being the oversight of anything that involves money will ALWAYS be a disaster. As a stand-alone program, it will probably go down as the most disastrous economic bill in the history of our country, hundreds of billions wasted with very little long-term results.
Since this spring, the federal government has handed out $517 billion through the Paycheck Protection Program, the main lifeline that Congress threw to small and midsize businesses to help them survive the coronavirus crisis. It’s a weighty amount of money, almost two-thirds of what Washington spent on the entire stimulus package it passed in 2009 to combat the Great Recession.
Unfortunately, it doesn’t seem to have bought us very much.
Hastily crafted as the economy began to collapse earlier this year, PPP was designed to keep businesses alive and Americans attached to their jobs while the country shut down to try and squelch the pandemic. It offers employers with 500 or fewer workers low-interest loans to cover their operating expenses, which the government will forgive if they avoid layoffs. (Somewhat larger companies can qualify if they are in the hospitality industry or meet the government’s previously established small-business size standards.) For most borrowers, it’s essentially free money that they can use to pay their bills and their staff.
Unfortunately, it doesn’t seem to have bought us very much.
Hastily crafted as the economy began to collapse earlier this year, PPP was designed to keep businesses alive and Americans attached to their jobs while the country shut down to try and squelch the pandemic. It offers employers with 500 or fewer workers low-interest loans to cover their operating expenses, which the government will forgive if they avoid layoffs. (Somewhat larger companies can qualify if they are in the hospitality industry or meet the government’s previously established small-business size standards.) For most borrowers, it’s essentially free money that they can use to pay their bills and their staff.
This week, a team of economists led by the Massachusetts Institute of Technology’s David Autor released the most detailed evaluation yet of the program’s results—and their conclusions were not flattering. The researchers found that PPP only boosted overall employment among eligible businesses by between 2 to 4.5 percent and likely saved about 2.31 million jobs, at the cost of $224,000 each.
To put those numbers in perspective, consider that there were 31.8 million Americans on the unemployment rolls at the start of this month, and that 2.4 million people filed for benefits last week alone. The country appears to have spent a half-trillion dollars and put just a small dent in joblessness. What’s more, we only paid for a temporary fix. PPP only provided loans equal to about 10 weeks of payroll expenses; now that the money is running out, some businesses appear ready to start laying off workers again.
Here’s another way to think about it: If each of those 2.31 million people who kept their jobs had gone on unemployment instead, and received a $600 check from the federal government each week, it would have cost Washington just $9,600 a head—$22 billion total—over four months. With the money left over, the feds could have given states an extra $10 billion to hire more staffers to process UI claims, spent another $293 billion doubling the checks the IRS sent to families, and still had another $192 billion left over to help businesses like bars, restaurants, movie theaters, salons, and gyms that were shut down for public health reasons keep paying their rent.
To put those numbers in perspective, consider that there were 31.8 million Americans on the unemployment rolls at the start of this month, and that 2.4 million people filed for benefits last week alone. The country appears to have spent a half-trillion dollars and put just a small dent in joblessness. What’s more, we only paid for a temporary fix. PPP only provided loans equal to about 10 weeks of payroll expenses; now that the money is running out, some businesses appear ready to start laying off workers again.
Here’s another way to think about it: If each of those 2.31 million people who kept their jobs had gone on unemployment instead, and received a $600 check from the federal government each week, it would have cost Washington just $9,600 a head—$22 billion total—over four months. With the money left over, the feds could have given states an extra $10 billion to hire more staffers to process UI claims, spent another $293 billion doubling the checks the IRS sent to families, and still had another $192 billion left over to help businesses like bars, restaurants, movie theaters, salons, and gyms that were shut down for public health reasons keep paying their rent.
