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I remain unconvinced that so many companies were on "thin ice" that a do nothing approach would have caused a collapse. Any evidence of this? I would've been o

I remain unconvinced that so many companies were on "thin ice" that a do nothing approach would have caused a collapse. Any evidence of this? I would've been okay-ish with the arrangement if there was some narrow qualification criteria like being in the grocery business or medical supply chain, etc. Fine dining restaurants: not essential Summer camps: not essential Non-profits: not essential Law firms: not essential either! And yet we paid them millions... _why?_ I picked a random company from the 150k list. A pizza place, around the corner. Been in business since 2007. They received $150,000-350,000. So a place deemed essential by the governor and that's permitted to operate curbside and takeout delivery after being open for 13 years is eligible for 150k? What kind of drugs are we on?

digitaltrees 6y ago
Do you know any restaurant owners or managers? Ask them about the drop in revenue and how long it can be sustained. Ask them how many employees they had and how many they need for curbside take out. Ask if they would have fired people absent PPP. Ask if they kept people employed because of PPP. Do you have a better suggestion? I doubt it. There are to many edge cases in business to create a program that will be perfect. So your alternative is to take the risk of mass bankruptcies. If PPP designers and law makers are wrong billions are wasted. If your approach tested and is wrong, the economy is wrecked. Decision is easy when framed that way.
digitaltrees 6y ago
When unemployment shoots to 25% it’s a sign of a lot of sever stress for businesses. Left uncheck the drop in demand will create further contraction. What more evidence do you want that urgent action system wide is needed? By the time the bankruptcy filings start its too late.
mardifoufs 6y ago
Yes, but the vast majority of the money is going to salaries. I'd even argue that there is absolutely no problem in funding even most of the "non essential" businesses. And to say that businesses were on thin ice by april is an understatement by the way: revenue disappeared overnight, lending froze almost overnight, liquidity became almost impossible to access. Even by early april half small businesses could not afford to pay rent, much less salaries. The financial system has never seen anything like what happened to march, I can't stress enough that almost every single "pipe" that make up systems we all depend on was collapsing. Programs like these took aways tons of uncertainty and deep fears of a recovery that would take a very, very long time. Things got much better when government support boosted confidence and guaranteed that people will still have money to spend. Now I've heard people argue that compensation for lost salaries should've been paid directly to the employees if they lost their jobs. But to put it mildly, recovery and return back to normal would have been extraordinarily harder if most of the non essential parts of the economy don't exist anymore. The price of letting everything go bankrupt only to reopen from scratch later is enormous and would amount to incredible waste not only of money but also years of work. The 150k may have been way too much for a local pizzeria, but it's better to overshoot than to aim for much better money allocation and risk losing precious time. You have to keep in mind that not only do businesses have to pay back the loans (if the money didn't go to salaries) but also that we will have ample time to take a closer look at each individual claim and punish fraud retroactively. The process is already starting as we can see with the linked website. At the end of the day, we just couldn't afford to have a better PPP program because no matter how much money we lose on fraud and waste, the alternative would have always been more expensive.

digitaltrees 6y ago

Do you know any restaurant owners or managers? Ask them about the drop in revenue and how long it can be sustained. Ask them how many employees they had and how many they need for curbside take out. Ask if they would have fired people absent PPP. Ask if they kept people employed because of PPP. Do you have a better suggestion? I doubt it. There are to many edge cases in business to create a program that will be perfect. So your alternative is to take the risk of mass bankruptcies. If PPP designers and law makers are wrong billions are wasted. If your approach tested and is wrong, the economy is wrecked. Decision is easy when framed that way.

digitaltrees 6y ago

When unemployment shoots to 25% it’s a sign of a lot of sever stress for businesses. Left uncheck the drop in demand will create further contraction. What more evidence do you want that urgent action system wide is needed? By the time the bankruptcy filings start its too late.

mardifoufs 6y ago

Yes, but the vast majority of the money is going to salaries. I'd even argue that there is absolutely no problem in funding even most of the "non essential" businesses. And to say that businesses were on thin ice by april is an understatement by the way: revenue disappeared overnight, lending froze almost overnight, liquidity became almost impossible to access. Even by early april half small businesses could not afford to pay rent, much less salaries. The financial system has never seen anything like what happened to march, I can't stress enough that almost every single "pipe" that make up systems we all depend on was collapsing. Programs like these took aways tons of uncertainty and deep fears of a recovery that would take a very, very long time. Things got much better when government support boosted confidence and guaranteed that people will still have money to spend. Now I've heard people argue that compensation for lost salaries should've been paid directly to the employees if they lost their jobs. But to put it mildly, recovery and return back to normal would have been extraordinarily harder if most of the non essential parts of the economy don't exist anymore. The price of letting everything go bankrupt only to reopen from scratch later is enormous and would amount to incredible waste not only of money but also years of work. The 150k may have been way too much for a local pizzeria, but it's better to overshoot than to aim for much better money allocation and risk losing precious time. You have to keep in mind that not only do businesses have to pay back the loans (if the money didn't go to salaries) but also that we will have ample time to take a closer look at each individual claim and punish fraud retroactively. The process is already starting as we can see with the linked website. At the end of the day, we just couldn't afford to have a better PPP program because no matter how much money we lose on fraud and waste, the alternative would have always been more expensive.