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The handout went to the wealthy in the form of Payroll Protection Loans that never were required to be disbursed to employees or repaid. And Wall Street got a

The handout went to the wealthy in the form of Payroll Protection Loans that never were required to be disbursed to employees or repaid. And Wall Street got a huge multi-trillion-dollar boost. The stimulus checks were a door prize.

brightball 4y ago
PPP loans were required to be paid out or paid back. Issuing those loans prevented nationwide layoffs and insurance termination for millions of people.
- pessimizer 4y ago
  https://www.pandemicoversight.gov/data-interactive-tools/data-stories/how-many-paycheck-protection-program-loans-have-been-forgiven https://www.pandemicoversight.gov/data-interactive-tools/dat... Update: 10.2 million PPP loans were forgiven. Here's why. > If borrowers use at least 60% of the loan to cover payroll within 8 or 24 weeks after receiving the loan, they can submit an application to have the loan forgiven. ----- edit: if anybody can clear this up for me, I'd appreciate it, but what could it possibly mean for "at least 60% of the loan to cover payroll?" Does that mean that the company has to spend its way into insolvency first, then after becoming insolvent pay out 60% of the loan to employees, or does it simply mean that an employer's payroll has to sum to at least 60% of the loan within 24 weeks, no matter how much cash the employer has? It seems like the difference between 1) handing out gifts to employers of up to 40% of their 24-week payroll, or 2) handing out gifts to employers that are up to 166% of their 24-week payroll. But I'm not a math scientist. Either way, making direct cash payments to employers in proportion to their payrolls is as stark an example of welfare for the rich as you could cite. That's like paying money to people in proportion to their total stockholdings, as long as they promise to spend at least 60% of those payments to buy more stock. Even worse in the execution, where tons of the smallest employers and the self-employed were left out in favor of companies with high-powered accounting firms or lawyers on staff.
  - nightski 4y ago
    There were limits on what you could spend the other 40% on (defined categories of expenses). You could spend 100% on payroll if you wanted, but it had a minimum of 60%. The other 40% had to be used for specific things such as building maintenance, etc... No owner could take a distribution of these funds (directly at least, although if this loan allowed them to be profitable they could of taken those profits). Businesses that wanted to be legit put this money into a specific account (in their accounting system) and tracked all expenses against that specific account for auditability. The only loans that had less strict rules were for sole proprietors/self employed businesses. But the size of the loan was capped pretty low relatively. Of course this program was highly flawed. But it was thrown together quickly in response to the pandemic. Personally I wish our government would already have plans in place ahead of time so everything wasn't done so hastily and last minute causing massive fraud.
    - pessimizer 4y ago
      What I'm trying to figure out is if they had to spend their own money before spending the loan. Otherwise it's strange to say that the money went to either payroll or "specific things such as building maintenance." The money went to the employer, and in return they wouldn't lay off so many employees that their 24-week payroll would fall below 60% of the amount of the loan (and a possible requirement that they'd have to spend the difference between the amount of the loan and the 24-week payroll on capital improvements?) Did they at least have to prove that it would be financially beneficial for them to do layoffs? > Of course this program was highly flawed. But it was thrown together quickly in response to the pandemic. Eh, this isn't a deep dive, these are basic questions about the concept. Not that a deep dive wouldn't be warranted with tens or hundreds of billions at stake.
      - nightski 4y ago
        As for certifying whether your business needed it or not you had to make a statement saying it was necessary for you to continue the business on the loan app. But it was an honor system. It will be up to the government to search out & prosecute fraudsters.

brightball 4y ago

PPP loans were required to be paid out or paid back. Issuing those loans prevented nationwide layoffs and insurance termination for millions of people.

pessimizer 4y ago
https://www.pandemicoversight.gov/data-interactive-tools/data-stories/how-many-paycheck-protection-program-loans-have-been-forgiven https://www.pandemicoversight.gov/data-interactive-tools/dat... Update: 10.2 million PPP loans were forgiven. Here's why. > If borrowers use at least 60% of the loan to cover payroll within 8 or 24 weeks after receiving the loan, they can submit an application to have the loan forgiven. ----- edit: if anybody can clear this up for me, I'd appreciate it, but what could it possibly mean for "at least 60% of the loan to cover payroll?" Does that mean that the company has to spend its way into insolvency first, then after becoming insolvent pay out 60% of the loan to employees, or does it simply mean that an employer's payroll has to sum to at least 60% of the loan within 24 weeks, no matter how much cash the employer has? It seems like the difference between 1) handing out gifts to employers of up to 40% of their 24-week payroll, or 2) handing out gifts to employers that are up to 166% of their 24-week payroll. But I'm not a math scientist. Either way, making direct cash payments to employers in proportion to their payrolls is as stark an example of welfare for the rich as you could cite. That's like paying money to people in proportion to their total stockholdings, as long as they promise to spend at least 60% of those payments to buy more stock. Even worse in the execution, where tons of the smallest employers and the self-employed were left out in favor of companies with high-powered accounting firms or lawyers on staff.
- nightski 4y ago
  There were limits on what you could spend the other 40% on (defined categories of expenses). You could spend 100% on payroll if you wanted, but it had a minimum of 60%. The other 40% had to be used for specific things such as building maintenance, etc... No owner could take a distribution of these funds (directly at least, although if this loan allowed them to be profitable they could of taken those profits). Businesses that wanted to be legit put this money into a specific account (in their accounting system) and tracked all expenses against that specific account for auditability. The only loans that had less strict rules were for sole proprietors/self employed businesses. But the size of the loan was capped pretty low relatively. Of course this program was highly flawed. But it was thrown together quickly in response to the pandemic. Personally I wish our government would already have plans in place ahead of time so everything wasn't done so hastily and last minute causing massive fraud.
  - pessimizer 4y ago
    What I'm trying to figure out is if they had to spend their own money before spending the loan. Otherwise it's strange to say that the money went to either payroll or "specific things such as building maintenance." The money went to the employer, and in return they wouldn't lay off so many employees that their 24-week payroll would fall below 60% of the amount of the loan (and a possible requirement that they'd have to spend the difference between the amount of the loan and the 24-week payroll on capital improvements?) Did they at least have to prove that it would be financially beneficial for them to do layoffs? > Of course this program was highly flawed. But it was thrown together quickly in response to the pandemic. Eh, this isn't a deep dive, these are basic questions about the concept. Not that a deep dive wouldn't be warranted with tens or hundreds of billions at stake.
    - nightski 4y ago
      As for certifying whether your business needed it or not you had to make a statement saying it was necessary for you to continue the business on the loan app. But it was an honor system. It will be up to the government to search out & prosecute fraudsters.