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I can't say with any kind of authority but my best guess is that private banks were involved in PPP as most going concerns already had a loan/float relationship

I can't say with any kind of authority but my best guess is that private banks were involved in PPP as most going concerns already had a loan/float relationship with them. Not that they don't have one with the IRS but I think no one wanted to task the IRS (and give them billions in additional funding) to build the infrastructure that banks already had to manage loans. PPP seems slightly different than single payer healthcare as the government is already a huge player in the space.

PaulHoule 5y ago
You're right that PPP took advantage of capabilities the banks already had and also, in terms of tail risk, the capability the government has for managing bank failures. Even if it is good policy, it erodes legitimacy because people see public ends leading to private profits. If you watch TV while working out at the gym, for instance, you see that 90%+ of the ads in certain dayparts are not for things you can buy with your own money but things you can buy with government benefits, a windfall you can get if you are hit by a car, etc. I'm certain that even people who qualify for those government benefits have their fantasies fed that other people (e.g. blacks) spend their lives just chiseling from the government and it drives them to vote Republican and ultimately be susceptible to crap like QAnon. I know a lot of people who are involved in road construction in Upstate NY and all of them are deeply cynical about the way the work is funded. People see the boondoggles in infrastructure construction and they think "I just want to protect my checkbook." (Usually the effect of corporate lobbying is a big part of this story. Medicare Advantage and Obamacare both were created by industry. PPP is a counterexample because legislators came up with it in a hurry and it wasn't something banks asked for.)

PaulHoule 5y ago

You're right that PPP took advantage of capabilities the banks already had and also, in terms of tail risk, the capability the government has for managing bank failures. Even if it is good policy, it erodes legitimacy because people see public ends leading to private profits. If you watch TV while working out at the gym, for instance, you see that 90%+ of the ads in certain dayparts are not for things you can buy with your own money but things you can buy with government benefits, a windfall you can get if you are hit by a car, etc. I'm certain that even people who qualify for those government benefits have their fantasies fed that other people (e.g. blacks) spend their lives just chiseling from the government and it drives them to vote Republican and ultimately be susceptible to crap like QAnon. I know a lot of people who are involved in road construction in Upstate NY and all of them are deeply cynical about the way the work is funded. People see the boondoggles in infrastructure construction and they think "I just want to protect my checkbook." (Usually the effect of corporate lobbying is a big part of this story. Medicare Advantage and Obamacare both were created by industry. PPP is a counterexample because legislators came up with it in a hurry and it wasn't something banks asked for.)