5 ms·

I've been really surprised that this hasn't been a political issue. These loans were a good deal larger than the student loans that've been forgiven, and a dre

by axus 4y ago

I've been really surprised that this hasn't been a political issue. These loans were a good deal larger than the student loans that've been forgiven, and a dream come true to anyone who's ever made money from fraud.

pirate787 4y ago
PPP fraud is a feature, not a bug.
- Clent 4y ago
  Political memory is so fleeting. The bill was stripped of any oversight by the allies of business.
houstonn 4y ago
People are so used to watching billions of dollars go missing or wasted that it has become background noise.
prottog 4y ago
I'm entirely unhappy about the whole PPP situation, but I think the reason why it's taken up less space in public debates is because ostensibly it was to compensate businesses for being forced to close. Student loans had no equivalent government mandate to have people take them on. I would prefer the counterfactual where nobody was forced to close (any longer than maybe the first couple of weeks) and therefore nobody got helicopter money; but since that isn't what happened, the next best thing would be aggressive prosecution of fraud. One can dream.
- PopAlongKid 4y ago
  PPP loans went to "job creators", always a favorite politically-protected class. >it was to compensate businesses for being forced to close More specifically, it was to "protect paychecks", to keep workers on the payroll who otherwise would have been let go. Sometimes, but not always, one of those workers was the business owner. In theory it was a pass-through benefit aimed at workers, but the employers not only had the loans forgiven, but also got a tax deduction for spending the government's money, and even sweeter in some cases, got increased tax basis in their business for the loan money they never repaid.
  - indymike 4y ago
    Before I hit the unpopular opinion part, yes, PPP and EIDL had a lot of fraudulent applications that were approved. That said, I'll share a little of what I learned because my company survived losing 85% of our revenue in 2020 because of EIDL and PPP. I and my other cofounders took huge pay cuts to get through 2020 and 2021, and without PPP we would have been out of business, and 12 employees would have lost their livelihoods. > PPP loans went to "job creators", always a favorite politically-protected class. Both PPP and EIDL were to businesses. Not to individuals. PPP was not a loan program. It was a grant. EIDL was a loan, and that was the program that had forgiveness. Being awarded PPP money required that you disclose payroll data before, during and after, and if you failed to meet terms, it would be converted to a loan. EIDL worked differently, if you met forgiveness, a percentage of your loan would be forgiven (I seem to recall 60% being the cap, but I could be wrong). In PPP there were caps on the amount a business owner could claim for their own compensation as a worker in the business. > got increased tax basis in their business for the loan money they never repaid. PPP was not a loan, it was a grant to cover payroll and unavoidable (i.e. rent) expenses during the initial lockdown. The IRS initially wanted to tax that (and for small businesses, that is at the personal rate of the owner) grant amount, which would have blunted the effect of PPP by 25-30%. The Trump adminstration stepped in and told the IRS to stand down, and changed the rules to prevent that. The purpose of PPP was really to ensure that businesses did not shut down permanently. The fact is that most small business only have sufficient cash to handle about 90 days of payroll and rent. Keeping the businesses alive would enable a faster rebound, because there was a study that estimated it would take eight years to re-grow that sector if those businesses were forced to shut down.
    - adrr 4y ago
      What percentage of PPP loans went to businesses that negative revenue impacts due to covid? PPP program was poorly structured, forgiveness should have been based on revenue impacts to the company which can be easily measured by using previous tax payments. We chose not take a PPP loan because our industry saw record growth during Covid and it wasn't morally right to take advantage of a program meant for struggling businesses. Our competitors received money even though they also had record revenue growth. We were punished for doing the right thing because that capital could been have been used to invest in the business.
efficax 4y ago
giving away money to business owners is always OK by the lights of people in power, since business owners help make the people in power rich. giving money to loser normies who can't pay their student loans? what's in it for them?
- dmix 4y ago
  This is a cute theory but in reality it's far more likely to be usual government malaise, laziness, and disregard for long term consequences than some organized secret push by millionaires with pull in the government.
  - colpabar 4y ago
    Yeah, anyone who thinks wealthy people have any pull in the united states government and use it to make themselves more wealthy must be some crazy alt right conspiracy theorist. Probably a white nationalist too. We all know everyone in the government is just dumb and all the trillions of dollars they waste is just because they make mistakes in excel and stuff.
    - prottog 4y ago
      Sure, one should always ask "Cui bono?", but it's equally important to also examine the incentive structures at play which drive the leviathan that is the government. At its core, the trillions of dollars of wasteful spending happens because politicians are rewarded for spending money and punished for asking where that money comes from or how effective the spending actually was, many years later. A good example is the Covid lockdowns that benefited the likes of Amazon or Home Depot at the expense of Main Street businesses. Cui bono? Certainly the wealthy class did. But did they collude and whisper into the ears of the halls of power in federal, state, and local levels (which all played roles in lockdowns) to make sure that people were forced to lock down harder and longer? No -- it's just the incentive structure. Politicians and bureaucrats had the choice between being rewarded for taking "decisive action" against the spread of the virus or pilloried for doing nothing, even if in hindsight it appears that we would have been better off doing nothing. Stuff like this is precisely why conservatives argue for limited government and more delegation of powers to lower levels of government. It's much easier for a wealthy person to have pull on a single US senator to make themselves more wealthy, than for that same person to have pull on twenty different state senators, or five hundred different city councilors.
readams 4y ago
PPP loans were always supposed to be forgiven from the beginning. Nobody would have taken the loans otherwise. It was not really a loan it was a payroll subsidy to keep the economy from collapsing. Also, this was actually authorized by Congress and not declared by fiat in an enormous executive overreach.
- leshow 4y ago
  If anything it's a good case of why "trickle down" economic policies don't work very well. Many businesses who got the loans still fired employees, the cost of each job saved was high.
  - Scoundreller 4y ago
    Yeah, just write every human a cheque and let the businesses that are already teetering on bankruptcy without anyone willing to rescue them go bankrupt.
    - leshow 4y ago
      Pretty flimsy strawman you've constructed there.
      - Scoundreller 4y ago
        We’re arguing for the same thing.
  - robswc 4y ago
    >Many businesses who got the loans still fired employees, the cost of each job saved was high. Which businesses? We're also looking with hindsight bias. There's no way to see what would have happened if businesses weren't bailed out.
NovemberWhiskey 4y ago
It's not a political issue because both parties were in favor of it.
MisterBastahrd 4y ago
It's sort of interesting. Just the mental gamesmanship aspect of the entire thing. There are people who will swear up and down that welfare is the root of all evil. That bootstrap pulling is necessary, that there's opportunity for everyone regardless of their situation, and that all you need is hard work and dedication to succeed in the US. They will wring their hands about the federal deficit and will howl about the size of the national debt. Just look at the student loan forgiveness issue. But if you dangle a $6K per head loan in front of them, with no consequences whatsoever, every one of these same people will take and say "what did you expect me to do? I've got a business to run." Because for the vast majority of them, complaining about welfare was never about their taxes, or even considering the plight of the individuals who need the money. It's about the thing that they complain the "woke" masses of doing. It's virtue signaling. It was never about the money. It was about self-justification.
- prottog 4y ago
  Is your point that people are hypocrites by complaining about welfare and turning around and taking welfare for themselves when it's offered with no strings attached? I suppose the hypocrisy is true, but it also doesn't come with a lot of weight. It'd be like pointing out that the people who post "no human being is illegal" signs on their lawns don't actually take in refugees or vagrants in their homes. I don't know about welfare being the root of all evil, but there are valid discussions to be had on that topic from people arguing in good faith, and I think it's perfectly justified for someone to feel that their taxes are too high or that welfare benefits provide too much.
Aunche 4y ago
I don't like PPP forgiveness, but at least it was voted on by Congress. Also, student loan forgiveness is literally fueling the problem that it's trying to solve. It will increase the willingness to pay of people of college, so colleges will increase tuition. Unlike businesses that reinvest their money to expand, colleges reinvest their money to chase prestige, so they have no incentive to keep prices constant.
newaccount2021 4y ago

by axus 4y ago

pirate787 4y ago

PPP fraud is a feature, not a bug.

Clent 4y ago
Political memory is so fleeting. The bill was stripped of any oversight by the allies of business.

houstonn 4y ago

People are so used to watching billions of dollars go missing or wasted that it has become background noise.

prottog 4y ago

I'm entirely unhappy about the whole PPP situation, but I think the reason why it's taken up less space in public debates is because ostensibly it was to compensate businesses for being forced to close. Student loans had no equivalent government mandate to have people take them on. I would prefer the counterfactual where nobody was forced to close (any longer than maybe the first couple of weeks) and therefore nobody got helicopter money; but since that isn't what happened, the next best thing would be aggressive prosecution of fraud. One can dream.

PopAlongKid 4y ago
PPP loans went to "job creators", always a favorite politically-protected class. >it was to compensate businesses for being forced to close More specifically, it was to "protect paychecks", to keep workers on the payroll who otherwise would have been let go. Sometimes, but not always, one of those workers was the business owner. In theory it was a pass-through benefit aimed at workers, but the employers not only had the loans forgiven, but also got a tax deduction for spending the government's money, and even sweeter in some cases, got increased tax basis in their business for the loan money they never repaid.
- indymike 4y ago
  Before I hit the unpopular opinion part, yes, PPP and EIDL had a lot of fraudulent applications that were approved. That said, I'll share a little of what I learned because my company survived losing 85% of our revenue in 2020 because of EIDL and PPP. I and my other cofounders took huge pay cuts to get through 2020 and 2021, and without PPP we would have been out of business, and 12 employees would have lost their livelihoods. > PPP loans went to "job creators", always a favorite politically-protected class. Both PPP and EIDL were to businesses. Not to individuals. PPP was not a loan program. It was a grant. EIDL was a loan, and that was the program that had forgiveness. Being awarded PPP money required that you disclose payroll data before, during and after, and if you failed to meet terms, it would be converted to a loan. EIDL worked differently, if you met forgiveness, a percentage of your loan would be forgiven (I seem to recall 60% being the cap, but I could be wrong). In PPP there were caps on the amount a business owner could claim for their own compensation as a worker in the business. > got increased tax basis in their business for the loan money they never repaid. PPP was not a loan, it was a grant to cover payroll and unavoidable (i.e. rent) expenses during the initial lockdown. The IRS initially wanted to tax that (and for small businesses, that is at the personal rate of the owner) grant amount, which would have blunted the effect of PPP by 25-30%. The Trump adminstration stepped in and told the IRS to stand down, and changed the rules to prevent that. The purpose of PPP was really to ensure that businesses did not shut down permanently. The fact is that most small business only have sufficient cash to handle about 90 days of payroll and rent. Keeping the businesses alive would enable a faster rebound, because there was a study that estimated it would take eight years to re-grow that sector if those businesses were forced to shut down.
  - adrr 4y ago
    What percentage of PPP loans went to businesses that negative revenue impacts due to covid? PPP program was poorly structured, forgiveness should have been based on revenue impacts to the company which can be easily measured by using previous tax payments. We chose not take a PPP loan because our industry saw record growth during Covid and it wasn't morally right to take advantage of a program meant for struggling businesses. Our competitors received money even though they also had record revenue growth. We were punished for doing the right thing because that capital could been have been used to invest in the business.

efficax 4y ago

giving away money to business owners is always OK by the lights of people in power, since business owners help make the people in power rich. giving money to loser normies who can't pay their student loans? what's in it for them?

dmix 4y ago
This is a cute theory but in reality it's far more likely to be usual government malaise, laziness, and disregard for long term consequences than some organized secret push by millionaires with pull in the government.
- colpabar 4y ago
  Yeah, anyone who thinks wealthy people have any pull in the united states government and use it to make themselves more wealthy must be some crazy alt right conspiracy theorist. Probably a white nationalist too. We all know everyone in the government is just dumb and all the trillions of dollars they waste is just because they make mistakes in excel and stuff.
  - prottog 4y ago
    Sure, one should always ask "Cui bono?", but it's equally important to also examine the incentive structures at play which drive the leviathan that is the government. At its core, the trillions of dollars of wasteful spending happens because politicians are rewarded for spending money and punished for asking where that money comes from or how effective the spending actually was, many years later. A good example is the Covid lockdowns that benefited the likes of Amazon or Home Depot at the expense of Main Street businesses. Cui bono? Certainly the wealthy class did. But did they collude and whisper into the ears of the halls of power in federal, state, and local levels (which all played roles in lockdowns) to make sure that people were forced to lock down harder and longer? No -- it's just the incentive structure. Politicians and bureaucrats had the choice between being rewarded for taking "decisive action" against the spread of the virus or pilloried for doing nothing, even if in hindsight it appears that we would have been better off doing nothing. Stuff like this is precisely why conservatives argue for limited government and more delegation of powers to lower levels of government. It's much easier for a wealthy person to have pull on a single US senator to make themselves more wealthy, than for that same person to have pull on twenty different state senators, or five hundred different city councilors.

readams 4y ago

PPP loans were always supposed to be forgiven from the beginning. Nobody would have taken the loans otherwise. It was not really a loan it was a payroll subsidy to keep the economy from collapsing. Also, this was actually authorized by Congress and not declared by fiat in an enormous executive overreach.

leshow 4y ago
If anything it's a good case of why "trickle down" economic policies don't work very well. Many businesses who got the loans still fired employees, the cost of each job saved was high.
- Scoundreller 4y ago
  Yeah, just write every human a cheque and let the businesses that are already teetering on bankruptcy without anyone willing to rescue them go bankrupt.
  - leshow 4y ago
    Pretty flimsy strawman you've constructed there.
    - Scoundreller 4y ago
      We’re arguing for the same thing.
- robswc 4y ago
  >Many businesses who got the loans still fired employees, the cost of each job saved was high. Which businesses? We're also looking with hindsight bias. There's no way to see what would have happened if businesses weren't bailed out.

NovemberWhiskey 4y ago

It's not a political issue because both parties were in favor of it.

MisterBastahrd 4y ago

It's sort of interesting. Just the mental gamesmanship aspect of the entire thing. There are people who will swear up and down that welfare is the root of all evil. That bootstrap pulling is necessary, that there's opportunity for everyone regardless of their situation, and that all you need is hard work and dedication to succeed in the US. They will wring their hands about the federal deficit and will howl about the size of the national debt. Just look at the student loan forgiveness issue. But if you dangle a $6K per head loan in front of them, with no consequences whatsoever, every one of these same people will take and say "what did you expect me to do? I've got a business to run." Because for the vast majority of them, complaining about welfare was never about their taxes, or even considering the plight of the individuals who need the money. It's about the thing that they complain the "woke" masses of doing. It's virtue signaling. It was never about the money. It was about self-justification.

prottog 4y ago
Is your point that people are hypocrites by complaining about welfare and turning around and taking welfare for themselves when it's offered with no strings attached? I suppose the hypocrisy is true, but it also doesn't come with a lot of weight. It'd be like pointing out that the people who post "no human being is illegal" signs on their lawns don't actually take in refugees or vagrants in their homes. I don't know about welfare being the root of all evil, but there are valid discussions to be had on that topic from people arguing in good faith, and I think it's perfectly justified for someone to feel that their taxes are too high or that welfare benefits provide too much.

Aunche 4y ago

I don't like PPP forgiveness, but at least it was voted on by Congress. Also, student loan forgiveness is literally fueling the problem that it's trying to solve. It will increase the willingness to pay of people of college, so colleges will increase tuition. Unlike businesses that reinvest their money to expand, colleges reinvest their money to chase prestige, so they have no incentive to keep prices constant.

newaccount2021 4y ago