US government-issued Paycheck Protection Program (PPP) to boost workers’ finances after the closure of small businesses during the pandemic. The government-sanctioned billions in interest-free loans for small businesses to pay their employees during the pandemic was an immediate remedy to prevent a financial crisis. The Dallas Morning News reports that the National Bureau of Economic Research’s study shows that only one-third of the total workers received the payments under the program. The remaining amount went to business people, shareholders, and suppliers.
Significant Portion Of The Amount Went To High-Income Bracket
The reports show that most workers lost their jobs during the pandemic. The Dallas Morning News states that workers receive about 23% to 34% of the PPP funds. Nearly three-fourths of the payments went to high-income families; the government issued $510 billion in 2020. Businesses making than $100,000 per year were eligible for the loans; the average annual household income was $255,000 the year before. The report suggests that a significant portion of the funds went to the highly-paid workers. Trump’s administration had issued the funds under the CARES act.
PPP Program Had Several Shortcomings
The Dallas Morning News quoted David Autor, an economics professor at MIT, who said, “The program was deeply flawed, but in a way, that was by design. The people designing it understood the flaws and didn’t see a way around them because of the woeful state of the US government infrastructure.” The program was designed to provide loans to fewer than 500 employees. US Small Business Administration’s data shows that approximately 940,000 businesses received PPP loans worth $62.8 billion. The reports suggest that the program’s implementation stages were faulty and increased the fraudulent invasions.
The Dallas Morning News quoted Bill Briggs, a former acting associate administrator at the SBA; he said, “PPP funds helped with jobs preservation as well as sending a clear signal that help was on the way in the early, confusing, and fearful days of the pandemic. No program of this size is without challenges. Still, nearly two years after PPP began, current economic conditions show PPP was a huge factor in the successful response to the pandemic.”