Where $521B in U.S. Small-Business Aid Went
A lot of people on social media and in the news are complaining about businesses that took the money that didn&#x27;t &quot;need&quot; it.  It&#x27;s fun to be outraged but I think there&#x27;s a few things everyone should know:<p>- First, the forgiveness requirements, while not fully finalized, cap the amount of money a single employee can be paid and have forgiven at ~20k.  It&#x27;s not like people are getting 1M dollar loans they can just pocket individually.  There are reporting&#x2F;documentation requirements in terms of employees on payroll before and after the loan was made, and documentation required to show a history of the salary that you&#x27;re asking to be forgiven.  I&#x27;m sure some things will slip through the cracks, but really they did a pretty good job of shoring up loopholes in the short time period they had to devise this thing.<p>- Second, very high salaries are not 100% forgivable.  If you&#x27;re making 200k, the most you can have forgiven from the PPP loan is the equivalent of a 100k salary during the 8 or 20 week forgiveness period (again, capped at 20k max)<p>- Third, who&#x27;s to say what the long term effects of the coronavirus are on the economy?  Just because a business doesn&#x27;t need the money at this moment doesn&#x27;t mean they won&#x27;t be wishing they took it six months from now.  Should people who got the stimulus checks and didn&#x27;t need them give them back too? I don&#x27;t see too many people complaining about that!  I still believe we haven&#x27;t yet seen the true shape of the coming recession, and think there will be much small business pain ahead.  Better to have given these businesses a hand now, I think.<p>- Fourth - you have to use the money more or less on payroll.  This was actually a huge sticking point for a lot of restaurants that wanted to use the money on rent.  It&#x27;s not like loan recipients can buy company Ferrari&#x27;s with the money - it mostly has to be given to employees in the form of payroll.<p>Overall the PPP was not perfect, but as far as quickly created government programs, I don&#x27;t think it was that bad.  Millions of small businesses got money, the vast majority of whom can actually use it to pay their middle class employees.<p>If we want to complain about government programs that are enriching the upper class - I think the latest Fed moves are a better place to start.