> Huge quantities of COVID money were pumped into companies that absolutely did not need it, and that's not even counting the massive volume of fraudulent claims. The COVID Paycheck Protection Program was supposed to shore up companies that would otherwise have to fire employees, but AFAICT nothing really stopped highly profitable companies from also collecting the money.

And this was by design. The administration at the the time explicilty pushed for there to be no oversight at all on this. The opposition party at the time said it's just setting things up for fraud and corruption, but it was desired to have no oversight. Not even after the funds had been released (if you wanted to make an argument that upfront oversight would have slowed down the distribution).

The administration both fired the inspectors general that would oversee the program, and passed laws to prevent transparency into the program. It was fairly controversial at the time, but now mostly lost in the haze of 2020 lockdowns.

https://www.washingtonpost.com/business/2020/06/15/inspector...

https://www.usatoday.com/story/opinion/2020/06/16/taxpayers-...

IMHO they should have done a compromise where the terms of eligibility were closer to 2nd draw in that you needed to have an actual emergency, huge sick leave, late bills, etc. Or at least high likely hood.

Still give it out right away. Just put a checkbox on the form. And then follow up with the details on forgiveness later.

If a company jumps the gun, they think things look black, but in a month it turns around and they are fine allow them to return it or keep it at a low (but not crazy low) interest rate.

For foreignness prove the loss/necessity.

So can go after egregious abusers. Because it wasn't abuse if you took it and didn't need it. So long as used for payroll, rent, etc. Because why wouldn't you take free money. We did.

I have multiple friends who received second draw PPP loans for their businesses in summer 2021 under the current administration. They received a significant percentage of their 2019 revenue in a full distribution to spend on payroll and some other expenses despite the fact that their monthly revenue at the time of distribution had rebounded. They were able to bank current revenues because current costs were covered by the loan, which will ultimately be forgiven. It didn't make any sense. I don't blame them for taking advantage of it though.

I’ll also chip in to say this was by design

I have 0 or negative AGI while sometimes having gross income/earnings/gains in the millions I got auto-sent several stimulus checks of the max size, because Congress wrote it based on having an “AGI of $75000 and lower” or similar number. AGI is after most tax deductions

Back to the by design part, the primary goal was to keep velocity in the economy high, and that means getting it to people with a high spend

Fairness is not a factor at all

Our economy works from velocity not whether one has money. Hoarding is worse than spending, not saying that poorer people would hoard just how its not a factor. It was designed to make maximum spending

Someone prewrote it for congress they knew what they were doing while congress was just scared

It's fine. We needed a sensitive intervention, not a specific one. And given the time constraints, those two were definitely in opposition. The administration made the right choice.

This. The perfect program 9 months later would not have been useful.

This is directly akin to using the defence of "i didnt realise the burning coal was hot". Common sense would have got you 99.9% of the way to not hurting yourself but you reached into the fire and grabbed it anyway. Given these are fiscal monetary "experts" they should have and could have done better. That includes delegating decisions and actions to those better able.

I agree with you they targeted small businesses pretty heavily with stimulus, and probably a lot of fraud occurred. While some of that money made it in the form of bonuses to employees, I bet a lot of it was soaked up by the frothy stock market.

People were opening businesses to take advantage of the PPP. I hope this gets addressed.

Yes but observing the end effect it was apparent a lot of that money went into the stock market, and thus didn’t really go where it was needed. The damage was done already.

> Huge quantities of COVID money were pumped into companies that absolutely did not need it (...)

Since when is revenue and profit dictated by anyone's sense of fairness? That's an awfully moralistic and judgemental take on everyone else's needs and desires.

Sadly this blend of judgemental view of everyone's money already hit small things like buying groceries. Damn the have-nots for generating inflation by actually stocking on the decent food that the well-to-do used to buy.

Do you see any problem in anyone spending their own money in any way they'd like?

I was referring to PPP loans from the government that were forgiven: https://www.sba.gov/funding-programs/loans/covid-19-relief-o...

These were supposed to keep at-risk companies from failing when the economy crashed, but then the economy didn't crash and instead it was just a huge government handout of free money to most companies.

I think you're putting too much weight on "did the economy crash" here. As in, "wow, the economy didn't crash, we shouldn't have done anything" aka "wow, Y2K didn't ruin everything, we shouldn't have updated all that code" or "we didn't get hacked, why did we bother applying security updates" or similar.

"We want to prevent the economy from crashing hard and long" is how I'd phrase motivations. Certain sectors did crash immediately, and yet the overall blast radius wasn't very large and a lot of stuff bounced back immediately.

That seems like a great success.

Loans being forgiven to generously even for companies that did NOT see a sustained dip in demand, on the other hand, is a more targeted specific problem, and a lesson to learn. But if you learn too broad a lesson like "stimulus is dumb" then you just drive yourself back off a difference cliff next time something exceptional happens.

A better lesson to learn is that shutting down major sectors of the economy was dumb. It was a total overreaction, and proved to be completely ineffective in controlling the pandemic. If politicians hasn't done that then there wouldn't have been a risk of an economic crash in the first place.

> If politicians hasn't done that then there wouldn't have been a risk of an economic crash in the first place.

This is naive and ignores the real sequence of events.

Things like conferences were getting canceled before the first official government actions in the US. Groceries were being hoarded. People were paying attention to events. The government sticking its head in the sand or just repeating "everything is fine, stay calm" messages wouldn't have prevented any impact.

Uncertainty is an economic killer. And if you remember early on, that uncertainty also led to a lot less controversy over the canceled events and restrictions than arose later. (Though in retrospect, even many "paranoid" estimates back then were far less than a million US deaths...)

Some level of stimulus was almost certain to be necessary regardless of official Covid actions in March 2020 unless you wanted to just let those companies and workers drown as people chose to change their behavior.

(The "restrictions should've been loosened earlier" argument is a much more reasonable one, but IMO still ignores how much of this was already local by winter of 2020, and also that at that point the initial economic damage was done.)

(That's before getting into the recklessness of assuming future severe novel diseases won't be even more deadly on limited early data...)

Not just companies; megachurches, antivax orgs, even a Jan 6 rioter got a PPP loan. The most egregious examples are starting to be brought to justice: https://www.justice.gov/opa/pr/man-convicted-27-million-ppp-...

Just reminder that if you know any abusers, report it to the DoJ.

These people who bought homes and shit with ppp are going to go to prison. I hope at least.

I don't think there's enough investigative power to find all the people who were abusing the system. The level of fraud that I personally witnessed of people filing hundreds of PPP loans for non-existent businesses was in the high 7-figure range, and that was just 2 guys I happened to hear of. There were likely hundreds of scammers doing the same thing in every major city, each stealing millions of dollars each.

It should be possible to identify these people very easily with a SQL query. To qualify, a business had to have been running for some time (years) and have payroll. So run a query for "loans issued to entities with banking history < 1y and w-2 withholding payments == 0".

Good luck figuring out where the money actually went, though.

And now recession seems to be here and they will probably get bailed out again.

Small business owners are a very powerful political force. If you are handing out checks to regular people (their employees) You basically have to give them something or they will wreck you.

If the PPP was intended to help struggling businesses, but your business wasn't actually struggling due to the pandemic, then you didn't need it. It has nothing to do with fairness.

> Do you see any problem in anyone spending their own money in any way they'd like?

"How dare you tell the bank robber to return the money he stole. Who are you to tell him how to spend his own money? That's awfully moralistic and judgmental of you."

The original PPP was intended to give money to all businesses with employees, to incent them to not lay off workers (it was a loan, repayable if the company reduced their workforce). The second version of the application form added a clause (after media bruhaha) about "potentially being affected by the pandemic", so would exclude some small subset of businesses that could absolutely guarantee that nothing about their future revenue and input costs would change aversely. Any concept of actually having been negatively affected in the past, prior to application came much later.