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So ive got a few questions about this legislation now that its in effect... >Businesses rushed to apply for the loans, which the government said would be forgi

So ive got a few questions about this legislation now that its in effect... >Businesses rushed to apply for the loans, which the government said would be forgiven... Forgiven? Then its not a loan anymore is it? Its a bailout. Was the intention to give a handout of cash to small businesses free of charge? >Democrats have since called for rules that would ensure smaller, community banks, particularly those that service minority and underbanked populations, have a leg up in the lending process. I mean, the program ran out of money a week ago. What exactly are we legislating? these are businesses that are likely already shuttered after waiting five weeks to be told they either dont qualify or the money sacks empty. This isnt something you get a do-over on. Rubio doesnt seem to care that Hilton is a nine billion dollar multinational corporation that could afford to keep the lights on in every hotel they franchise for the next year, easily, without federal aid. They could give away old hotels as makeshift hospitals. Hilton is the thirty-sixth largest company in the USA and the fact that they qualified for something called a small business relief fund can only be attributed to a completely detached legislature if you're being amicable and giving the current legislation a fair chance to be anything but corrupt but frankly thats hard to do when the presidents friends are getting kickbacks from this program. https://www.npr.org/2020/04/20/839455480/company-with-ties-to-trump-receives-millions-from-small-business-loan-program https://www.npr.org/2020/04/20/839455480/company-with-ties-t... What Rubio has basically managed to do is wipe out coffee houses, machine shops, shoe repair businesses, daycares and nail salons in every north american city. Its pretty transparent that this funding was never intended to make it to taco trucks and barbers.

linuxftw 7y ago
> Forgiven? Then its not a loan anymore is it? Its a bailout. Was the intention to give a handout of cash to small businesses free of charge? Yes, it's handing out free money to some and not others based on basically nothing. What's worse, the banks are collecting a cool 1% whether someone pays back the loan or not. 300B in loans is 3B to the banks, 0 risk. > Its pretty transparent that this funding was never intended to make it to taco trucks and barbers. Sadly, I don't think the congress people are that smart. They probably actually thought this program would work in some useful capacity.
- luckylion 7y ago
  > Sadly, I don't think the congress people are that smart. They probably actually thought this program would work in some useful capacity. At some point, being charitable and choosing incompetence over intention as the explanation for behavior does become willful naivete, doesn't it?
  - NateEag 7y ago
    Yes, but I don't think we're there yet. Even if we assume this bill was passed entirely as an attempt to curry favor with voters, it should be clear that such an attempt would be doomed if it tried to favor big companies while claiming to be aimed at little ones. Congresspeople try hard to avoid obvious lies, especially about things all voters care about, and most especially during an election year.
    - salawat 7y ago
      To expand on this, legislators aren't exactly known for their higher order conflict resolution strategies when lawmaking, and the "politician's fallacy" is called what it is for a reason. I was highly skeptical of their proposal from the get go simply because there wasn't anything preventing "large" players from attaining leverage other than their own sensibilities. Something which sadly is a bit fraught in the historical sense.
- kube-system 7y ago
  Of course the banks are collecting money. Someone has to administer the loans, and there are costs to doing this. It is basically impossible to create a new organization overnight to do this, so existing channels were used.
- _curious_ 7y ago
  "Yes, it's handing out free money to some and not others based on basically nothing." It's not based on "basically nothing" - at least from the banks perspective as originators in this case - it's based on which corporate accounts are deemed to be of greatest financial value to them. They can, will, did pick and choose loan beneficiaries in their portfolio based on how it will benefit them - nothing less. This means that business customers with big debts to the bank were a priority. It's absolutely a bailout of the banks in a difference scheme, albeit a bit more blatantly nepotistic than we're used to seeing so far. And yes, they get a point in services for treating themselves too... All that said, your gist is correct in that it's basically free money benefiting some at the expense of others which is why personally, morally, I am not in favor of corporate welfare under any circumstances - impossible to do so "fairly".
MattGaiser 7y ago
> Rubio doesnt seem to care that Hilton is a nine billion dollar multinational corporation that could afford to keep the lights on in every hotel they franchise for the next year, easily, without federal aid. Hilton would wait for the hotel owners (who are sometimes what you imagine a family-owned business might be like) to go bust and then would buy the hotel from under them at a firesale price. If they lacked the cash, they would partner with a hedge fund to do it. As much as it seem that franchisees are part of the larger corporation, they often really aren't. Rather, they are the faceless independent contractors of the hotel business, except ones which have a bit more capital than your lunch delivery driver. Blocking them from small business funds makes as much sense as stiffing your Uber driver on the tip to protest their corporate culture. Sure, both actions will hurt the parent corporation by reducing the number of people working for them, but it hurts the little guy more.
- _curious_ 7y ago
  Are you comparing a Hilton franchisee to an Uber driver, because it sounds like it. I haven't checked on the qualifications to independently own/operate a Hilton hotel, but something tells me one must have at least a million in assets while Uber drivers on the other hand, probably hover around zero assets on average at any given point in time.
  - MattGaiser 7y ago
    Yes I am. > but something tells me one must have at least a million in assets " Rather, they are the faceless independent contractors of the hotel business, except ones which have a bit more capital than your lunch delivery driver." I acknowledge that. I don't deny that the Hilton owner/operator has larger numbers on his balance sheet. I am just saying that the dynamic is similar between a Hilton operator and Hilton and an Uber driver and Uber. > probably hover around zero assets on average at any given point in time. No. They have a $10,000 (around that to get approved for Uber) car instead of a million dollar hotel. Or more likely in both cases, they have a million dollar car loan rather than a $10,000 car loan.
    - 7y ago
finder83 7y ago
I believe it's being called a loan because there are provisions in which it will not be forgiven. Such as if you lay off employees or furlow before a certain date. I don't have first hand knowledge though, only from someone who went through the process.
chrismcb 7y ago
Yes, it is a bailout... If used in a certain way, otherwise it is a loan. Considering the government ordered the businesses to close, bailing them out seems the right thing to do. It isn't like last time when banks were mismanaged and got a huge bailout
- Spivak 7y ago
  It's absolutely insane to me that people think that every business, apparently, needs to bake in a half-year long government ordered shutdown of their operations and sit on cash like a dragon so they can keep paying their rents and employees.
  - _curious_ 7y ago
    There are definitely some businesses - owners, shareholders, directors - who have not spent every dollar made and conserved their capital in some form or another so that in the event of a catastrophic situation they would be prepared. It's not insane...instead it's prudent to save and invest (not saying it's cash on hand/books). They are not asking for a bailout from anyone, in fact, they are well-positioned to capitalize on the changes and opportunities in their respective markets. Such opportunities would actually be greater if the government did not intervene, so in a way it's kind of perverse that those who sacrificed and saved are being penalized. Every business has a choice and while more popular pathway in modern America may be to live on the edge, it's not unanimous.
gumby 7y ago
> >Businesses rushed to apply for the loans, which the government said would be forgiven... > Forgiven? Then its not a loan anymore is it? Its a bailout. Was the intention to give a handout of cash to small businesses free of charge? The intent was indeed to just hand out the cash. The weird mechanism was to try to do it quickly through infrastructure that already exists (SBA program implemented through banks already working with small businesses) with a little bit of control on how spent (if you don’t spend 75% of it on payroll or a few other things like rent then it remains a loan). The people writing the law knew it was a kludge but wanted to get the money flowing quickly, I don’t want to defend the implementation nor especially a scumbag like Rubio, but he didn’t kill those businesses as much as fail to rescue them. Those megacorps got their lawyers to start working on angles while the legislation was being written; the small shops only started honking about it once the law came into effect.
- dhimes 7y ago
  Killing and failing to rescue are kind of the same thing here. Those big corporations should have been prevented first- and then let them sue later. Now it's the other way around. And you should definitely blame scumbags like Rubio. There's a reason reputation is a thing.
  - Spivak 7y ago
    Selectively choosing who to rescue I think is much more of a grey area. Despite the cruise industry being healthy business that would not have failed any time soon outside of something crazy like a global pandemic people are trying to play political games with the recuse money because they don't like certain businesses. This isn't really about what's right or what people deserve, it's that when we come out of this we don't want to have whole industries wiped out arbitrarily and we certainly don't want to punish the companies that are paying their workers though this despite them not actually being able to work.
- incongruity 7y ago
  If you’re on a boat and someone falls overboard have you killed them if: 1) You don’t have a life preserver to throw them? No 2) You don’t have a life preserver to throw them and you don’t look for one? Regrettable, but still probably not. 3) You have a life preserver and don’t throw it to them? Yeah, that’s kinda bad. 4) You have a life preserver but you throw it to your rich friend who is still on deck because he paid for your stateroom and he collects life preservers? Yeah - you’re a schmuck and a murderer. So is your rich friend.
wiredfool 7y ago
The stimulus is also technically a loan against your 2020 tax refund. As someone who's overseas and pays no US tax right now, the stimulus looks like a liability in my account, rather than a help.
- GrinningFool 7y ago
  This is kind of correct, but a bit misleading. It's an advance (loan) against a credit that will be applied to your 2020 taxes. So if you could somehow decline the stimulus check, you could then apply the credit to your 2020 tax bill next April. But there is no path by which you'd repay it as a loan received. - If you were getting a $0 tax bill, you'll still have a $0 tax bill - If you owed $1500, you'd still owe $1500. - If you overpaid 1500, you'd still get a $1500 refund.
  - wiredfool 7y ago
    That's not what my accountant has said.
    - GrinningFool 7y ago
      I'd be interested in hearing more; I haven't been able to find anything that isn't a variant of what I posted earlier.
kube-system 7y ago
> Forgiven? Then its not a loan anymore is it? Its a bailout. Was the intention to give a handout of cash to small businesses free of charge? The intention was to hand out cash for a specific purpose over a period of time. Companies that fulfill the intended purpose will have it forgiven, those who don't have to pay it back. It will or will not be a loan depending on how small businesses actually use the money.

linuxftw 7y ago

> Forgiven? Then its not a loan anymore is it? Its a bailout. Was the intention to give a handout of cash to small businesses free of charge? Yes, it's handing out free money to some and not others based on basically nothing. What's worse, the banks are collecting a cool 1% whether someone pays back the loan or not. 300B in loans is 3B to the banks, 0 risk. > Its pretty transparent that this funding was never intended to make it to taco trucks and barbers. Sadly, I don't think the congress people are that smart. They probably actually thought this program would work in some useful capacity.

luckylion 7y ago
> Sadly, I don't think the congress people are that smart. They probably actually thought this program would work in some useful capacity. At some point, being charitable and choosing incompetence over intention as the explanation for behavior does become willful naivete, doesn't it?
- NateEag 7y ago
  Yes, but I don't think we're there yet. Even if we assume this bill was passed entirely as an attempt to curry favor with voters, it should be clear that such an attempt would be doomed if it tried to favor big companies while claiming to be aimed at little ones. Congresspeople try hard to avoid obvious lies, especially about things all voters care about, and most especially during an election year.
  - salawat 7y ago
    To expand on this, legislators aren't exactly known for their higher order conflict resolution strategies when lawmaking, and the "politician's fallacy" is called what it is for a reason. I was highly skeptical of their proposal from the get go simply because there wasn't anything preventing "large" players from attaining leverage other than their own sensibilities. Something which sadly is a bit fraught in the historical sense.
kube-system 7y ago
Of course the banks are collecting money. Someone has to administer the loans, and there are costs to doing this. It is basically impossible to create a new organization overnight to do this, so existing channels were used.
_curious_ 7y ago
"Yes, it's handing out free money to some and not others based on basically nothing." It's not based on "basically nothing" - at least from the banks perspective as originators in this case - it's based on which corporate accounts are deemed to be of greatest financial value to them. They can, will, did pick and choose loan beneficiaries in their portfolio based on how it will benefit them - nothing less. This means that business customers with big debts to the bank were a priority. It's absolutely a bailout of the banks in a difference scheme, albeit a bit more blatantly nepotistic than we're used to seeing so far. And yes, they get a point in services for treating themselves too... All that said, your gist is correct in that it's basically free money benefiting some at the expense of others which is why personally, morally, I am not in favor of corporate welfare under any circumstances - impossible to do so "fairly".

MattGaiser 7y ago

> Rubio doesnt seem to care that Hilton is a nine billion dollar multinational corporation that could afford to keep the lights on in every hotel they franchise for the next year, easily, without federal aid. Hilton would wait for the hotel owners (who are sometimes what you imagine a family-owned business might be like) to go bust and then would buy the hotel from under them at a firesale price. If they lacked the cash, they would partner with a hedge fund to do it. As much as it seem that franchisees are part of the larger corporation, they often really aren't. Rather, they are the faceless independent contractors of the hotel business, except ones which have a bit more capital than your lunch delivery driver. Blocking them from small business funds makes as much sense as stiffing your Uber driver on the tip to protest their corporate culture. Sure, both actions will hurt the parent corporation by reducing the number of people working for them, but it hurts the little guy more.

_curious_ 7y ago
Are you comparing a Hilton franchisee to an Uber driver, because it sounds like it. I haven't checked on the qualifications to independently own/operate a Hilton hotel, but something tells me one must have at least a million in assets while Uber drivers on the other hand, probably hover around zero assets on average at any given point in time.
- MattGaiser 7y ago
  Yes I am. > but something tells me one must have at least a million in assets " Rather, they are the faceless independent contractors of the hotel business, except ones which have a bit more capital than your lunch delivery driver." I acknowledge that. I don't deny that the Hilton owner/operator has larger numbers on his balance sheet. I am just saying that the dynamic is similar between a Hilton operator and Hilton and an Uber driver and Uber. > probably hover around zero assets on average at any given point in time. No. They have a $10,000 (around that to get approved for Uber) car instead of a million dollar hotel. Or more likely in both cases, they have a million dollar car loan rather than a $10,000 car loan.
  - 7y ago

finder83 7y ago

I believe it's being called a loan because there are provisions in which it will not be forgiven. Such as if you lay off employees or furlow before a certain date. I don't have first hand knowledge though, only from someone who went through the process.

chrismcb 7y ago

Yes, it is a bailout... If used in a certain way, otherwise it is a loan. Considering the government ordered the businesses to close, bailing them out seems the right thing to do. It isn't like last time when banks were mismanaged and got a huge bailout

Spivak 7y ago
It's absolutely insane to me that people think that every business, apparently, needs to bake in a half-year long government ordered shutdown of their operations and sit on cash like a dragon so they can keep paying their rents and employees.
- _curious_ 7y ago
  There are definitely some businesses - owners, shareholders, directors - who have not spent every dollar made and conserved their capital in some form or another so that in the event of a catastrophic situation they would be prepared. It's not insane...instead it's prudent to save and invest (not saying it's cash on hand/books). They are not asking for a bailout from anyone, in fact, they are well-positioned to capitalize on the changes and opportunities in their respective markets. Such opportunities would actually be greater if the government did not intervene, so in a way it's kind of perverse that those who sacrificed and saved are being penalized. Every business has a choice and while more popular pathway in modern America may be to live on the edge, it's not unanimous.

gumby 7y ago

> >Businesses rushed to apply for the loans, which the government said would be forgiven... > Forgiven? Then its not a loan anymore is it? Its a bailout. Was the intention to give a handout of cash to small businesses free of charge? The intent was indeed to just hand out the cash. The weird mechanism was to try to do it quickly through infrastructure that already exists (SBA program implemented through banks already working with small businesses) with a little bit of control on how spent (if you don’t spend 75% of it on payroll or a few other things like rent then it remains a loan). The people writing the law knew it was a kludge but wanted to get the money flowing quickly, I don’t want to defend the implementation nor especially a scumbag like Rubio, but he didn’t kill those businesses as much as fail to rescue them. Those megacorps got their lawyers to start working on angles while the legislation was being written; the small shops only started honking about it once the law came into effect.

dhimes 7y ago
Killing and failing to rescue are kind of the same thing here. Those big corporations should have been prevented first- and then let them sue later. Now it's the other way around. And you should definitely blame scumbags like Rubio. There's a reason reputation is a thing.
- Spivak 7y ago
  Selectively choosing who to rescue I think is much more of a grey area. Despite the cruise industry being healthy business that would not have failed any time soon outside of something crazy like a global pandemic people are trying to play political games with the recuse money because they don't like certain businesses. This isn't really about what's right or what people deserve, it's that when we come out of this we don't want to have whole industries wiped out arbitrarily and we certainly don't want to punish the companies that are paying their workers though this despite them not actually being able to work.
incongruity 7y ago
If you’re on a boat and someone falls overboard have you killed them if: 1) You don’t have a life preserver to throw them? No 2) You don’t have a life preserver to throw them and you don’t look for one? Regrettable, but still probably not. 3) You have a life preserver and don’t throw it to them? Yeah, that’s kinda bad. 4) You have a life preserver but you throw it to your rich friend who is still on deck because he paid for your stateroom and he collects life preservers? Yeah - you’re a schmuck and a murderer. So is your rich friend.

wiredfool 7y ago

The stimulus is also technically a loan against your 2020 tax refund. As someone who's overseas and pays no US tax right now, the stimulus looks like a liability in my account, rather than a help.

GrinningFool 7y ago
This is kind of correct, but a bit misleading. It's an advance (loan) against a credit that will be applied to your 2020 taxes. So if you could somehow decline the stimulus check, you could then apply the credit to your 2020 tax bill next April. But there is no path by which you'd repay it as a loan received. - If you were getting a $0 tax bill, you'll still have a $0 tax bill - If you owed $1500, you'd still owe $1500. - If you overpaid 1500, you'd still get a $1500 refund.
- wiredfool 7y ago
  That's not what my accountant has said.
  - GrinningFool 7y ago
    I'd be interested in hearing more; I haven't been able to find anything that isn't a variant of what I posted earlier.

kube-system 7y ago

> Forgiven? Then its not a loan anymore is it? Its a bailout. Was the intention to give a handout of cash to small businesses free of charge? The intention was to hand out cash for a specific purpose over a period of time. Companies that fulfill the intended purpose will have it forgiven, those who don't have to pay it back. It will or will not be a loan depending on how small businesses actually use the money.