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The PPP loan program was actually pretty close to this, if executed well and funded sufficiently (obviously, it wasn't). The unemployment benefit extension and

The PPP loan program was actually pretty close to this, if executed well and funded sufficiently (obviously, it wasn't). The unemployment benefit extension and hack (unemployment + $600) was the real critical mistake that we'll spend a long time fixing. The QE / money printing is complicated, but it's worth nothing that Japan has been "printing money" for a long, long time, and QE is a mainstay of Abe-nomics (so the Japan subsidy here is absolutely coupled with aggressive QE). Battling deflation to hit inflation goals is a reasonable goal for a central bank, IMO, but obviously it's not cut and dry.

tempsy 7y ago
I’m not convinced there’s any adequate oversight with the PPP program though at all. Massive moral hazard problem with owners gaming it long enough to have it forgiven or declare bankruptcy after spending it recklessly and then laying people off after the minimum 8 week period anyway. I’m sure there’s also a massive fraud problem with people just spinning up fake companies and payroll statements to get free money. Banks have zero incentive to monitor these companies because it’s all guaranteed by the government and they’ve all been overpaid for doing simple paperwork.
coffeevradar 7y ago
>The unemployment benefit extension and hack (unemployment + $600) was the real critical mistake that we'll spend a long time fixing. What was the alternative? Existing unemployment benefits are insufficient for households to pay bills and the PP program at best would have saved a small portion of the overall jobs lost.
- bpodgursky 7y ago
  Ideally, basically what Japan is doing. Don't try to discriminate on company, don't make it complex, just cut a check to keep employees on the payroll. There's no dumb drama over "who gets the loans", if all employers do.
- Izkata 7y ago
  The extra $600 being a flat country-wide amount was the mistake here: https://www.cnbc.com/2020/04/22/she-got-a-paycheck-protection-loan-her-employees-hate-her-for-it.html https://www.cnbc.com/2020/04/22/she-got-a-paycheck-protectio...
rswail 7y ago
The federal government issuing funds via the inadequate state UI mechanisms adds unnecessary friction. The way for the money to have been issued is that each Social Security enrollee be sent funds from the Federal government, irrespective of income or employment status. Those who have immediate needs would immediately spend. Those that do not would either be forced to invest/deposit the funds or otherwise continue economic consumption by spending. Either way, the issuing of funds would have been much more efficient and fast than the mishmash of state UI programs and the IRS.

tempsy 7y ago

I’m not convinced there’s any adequate oversight with the PPP program though at all. Massive moral hazard problem with owners gaming it long enough to have it forgiven or declare bankruptcy after spending it recklessly and then laying people off after the minimum 8 week period anyway. I’m sure there’s also a massive fraud problem with people just spinning up fake companies and payroll statements to get free money. Banks have zero incentive to monitor these companies because it’s all guaranteed by the government and they’ve all been overpaid for doing simple paperwork.

coffeevradar 7y ago

>The unemployment benefit extension and hack (unemployment + $600) was the real critical mistake that we'll spend a long time fixing. What was the alternative? Existing unemployment benefits are insufficient for households to pay bills and the PP program at best would have saved a small portion of the overall jobs lost.

bpodgursky 7y ago
Ideally, basically what Japan is doing. Don't try to discriminate on company, don't make it complex, just cut a check to keep employees on the payroll. There's no dumb drama over "who gets the loans", if all employers do.
Izkata 7y ago
The extra $600 being a flat country-wide amount was the mistake here: https://www.cnbc.com/2020/04/22/she-got-a-paycheck-protection-loan-her-employees-hate-her-for-it.html https://www.cnbc.com/2020/04/22/she-got-a-paycheck-protectio...

rswail 7y ago

The federal government issuing funds via the inadequate state UI mechanisms adds unnecessary friction. The way for the money to have been issued is that each Social Security enrollee be sent funds from the Federal government, irrespective of income or employment status. Those who have immediate needs would immediately spend. Those that do not would either be forced to invest/deposit the funds or otherwise continue economic consumption by spending. Either way, the issuing of funds would have been much more efficient and fast than the mishmash of state UI programs and the IRS.