The post-mortem on the $800 billion US Paycheck Protection Program is damning

A commonly-heard refrain from those lamenting inflation is that the government gave workers too much money during the pandemic and that ‘nobody wants to work anymore’.

Well workers weren’t the only ones who benefited from government largess. The enormous $800 billion Paycheck Protection Program — the largest and fastest of Washington bailouts — was a complete joke. It was touted as a ‘loan’ program and the media ate up that obvious lie. In truth it was a ‘forgivable loan’ program, which is just another way of saying ‘free money’. All businesses had to do was say the money was for payroll, benefits, utilities, rent or mortgage payments.

A study this week from the St Louis Fed delivered the predictable results:

• The cost per job
  saved for one year was $169,000 to $258,000, which was much higher than
  the average amount—$58,200—paid in wages and benefits to small-business
  employees in 2020
• Only about one-quarter of PPP funds supported jobs that otherwise would have disappeared
• The PPP’s benefits flowed disproportionately to wealthier households
  rather than to the rank-and-file workers that its funds were intended to
  reach
• The authors concluded that the PPP cost taxpayers roughly $4 for every
  $1 of wages and benefits received by workers in “saved” jobs. The
  “leakage”—$3 out of every $4 distributed through the program—went to
  small-business owners
• 72% of PPP funds were captured by households with incomes in the top 20% of the national distribution

The ‘small’ business caveat was also suspect, as it included companies with up to 500 employees.

I called this scam out from the beginning. The media’s job covering it was disgraceful. It’s a shame this new study has gotten such little traction.