Posted on 07/08/2022 7:04:32 AM PDT by george76
Study found that taxpayers shelled out $4 for every $1 in wages and benefits received by workers from the Paycheck Protection Program.
Taxpayers paid $4 for every $1 in wages and benefits received by workers in jobs saved by the federal government’s pandemic Paycheck Protection Program (PPP), according to a new study by the Federal Reserve Bank of St. Louis.
The Fed study also found PPP didn’t support jobs at risk of disappearing, and money flowed disproportionately to wealthier households.
“The PPP was a very large and very timely fiscal-policy intervention, saving about 3 million jobs at its peak in the second quarter of 2020 and distributing $800 billion well within two years of the onset of the COVID-19 crisis,” authors William Emmons and Drew Dahl concluded in their study, “Was the Paycheck Protection Program Effective?”
“But it was poorly targeted, as almost three-quarters of its benefits went to unintended recipients, including business owners, creditors and suppliers, rather than to workers. Due to differences in the typical incomes of those varied constituencies, it also ended up being quite regressive compared with other major COVID-19 relief programs, as it benefited high-income households much more.”
When COVID-19 pandemic-induced executive orders forced small businesses to stop or reduce operations, the PPP was created as a temporary program under the Coronavirus Aid, Relief and Economic Security (CARES) Act. Forgivable loans began on April 3, 2020, one week after President Donald Trump signed the legislation and three weeks after a national emergency was declared. The low-interest loans could be made without collateral for up to $10 million to businesses with fewer than 500 employees. The loans were forgivable if businesses maintained employment and wages at pre-pandemic levels for two to six months following acceptance of the funds.
The Small Business Administration reported 90% of the nearly $800 billion in PPP loans were forgiven by last month, according to the study.
The Fed report quoted research published in the Journal of Economic Perspectives estimating PPP loans saved 2.97 million jobs per week in the second quarter of 2020 and 1.75 million per week during the fourth quarter of 2020. The research also found the cost per job saved for one year was $169,000 to $258,000. The average wage and benefits for a small business employee was $58,200 in 2020.
Small business owners spent $3 out of every $4 in PPP to pay suppliers and meet other expenses, according to the Fed report. The research found that 72% of PPP funds went to households with incomes in the top 20% of the national distribution. Comparatively, 20% to 25% of the federal government’s unemployment insurance went to households in the top 20%. Approximately 10% to 15% of stimulus checks – up to $1,200 per adult and $500 per child – went to households in the top 20%.
It was a total waste. Never should have happened. I know people who got 20 grand of free money for no reason, it was a total sham. Typical big government waste and corruption.
It worked exactly as designed. Just another boondoggle made to destroy America
Tell me again how the proposed carbon schemes will charge every family $10,000 more for fossil fuel usage and the government will rebate it to us in tax credits. Not to worry! Your competent government is up to the job.
Let this stupid PPP debacle be a warning to us to NEVER trust the government to do anything efficiently or correctly.
But we all knew that to start with.
I never got a pony.
When will the arrests for the theft of the funds begin?
If the Biden admin. were in charge of the Sahara desert, they’d run out of sand.
Hunter Biden’s hooker secured a $20,000 PPE after Joe was installed.. Deboves was one of the Las Vegas prostitutes who bought crack for ... show cased throughout Biden’s laptop..
https://dailycaller.com/2022/06/07/hunter-biden-hooker-covid-relief-biden-white-house/
Divide 800 billion by 10 or 20 grand and that’s how many people profited off this scam.
I suspect that this is mostly true, but there is a caveat. I think a lot of business owners were protected from a sharp downturn in the economy (otherwise known as the shut down) and there was a big ripple effect into almost all businesses. It was not just service sector tourism and hospitality.
Did most of the PPP money go directly into employees pockets? No.
Did a lot of people keep their jobs at businesses that otherwise would have gone under? Very probable.
Fed report finds 75% of $800 billion Paycheck Protection Program didn’t reach employees
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100%, however, did contribute to rampant inflation. Dollars received without a contributing good or service equals inflation.
Oddly, It found its way to Democrat campaign coffers..............
18th century economist/philosopher Richard Cantillon described how centrally-controlled, fiat money (ie money that can be printed and created from nothing) ALWAYS ends up benefitting government and its cronies, who receive those new money flows first, at the expense of average workers and society, who only receive it later, after inflation has occurred.
His ideas greatly influenced Adam Smith - and THESE were the prevalent economic notions which informed America’s Founding Fathers.
It was only progressives, keynesians and central planners of the 20th century who very effectively removed these common-sense beliefs from public discourse and acceptance.
Gee, what a surprise. /sarc
The surprise would be if a government program worked and there was some kind of actual accountability.
Yep, no doubt. The program worked as intended.
How much of that money wound up in the DNC coffers?
Politicians use emergency relief spending programs to allow cronies and the well connected to steal us blind. It’s been that way for decades.
I remember reading reports of FEDERAL PRISONERS getting PPP $$$$$
true
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