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It probably should’ve been administered from the government directly to the small business owners, instead of going through banks. Banks ended up being gate keepers in a way that wasn’t intended, and people who already had relationships with those banks and those who qualified for larger loans (really not small business) got bump to the head of the line at the expense of smaller businesses.
At least 40% of our small town's small businesses benefited. I can't imagine many of those not already having a relationship with a bank. How small and what kind of business, and how did they avoid banks?
It probably should’ve been administered from the government directly to the small business owners, instead of going through banks. Banks ended up being gate keepers in a way that wasn’t intended, and people who already had relationships with those banks and those who qualified for larger loans (really not small business) got bump to the head of the line at the expense of smaller businesses.
That’s how it played out, companies with < 20 employees only received 26% of the PPP funds, even though they account for over 80% of small businesses. The latest proposed stimulus is essentially going to forgive all prior PPP loans under $150K — it would have been simpler to just grant the money to small businesses and let them find the best way to spend it.
At least 40% of our small town's small businesses benefited. I can't imagine many of those not already having a relationship with a bank. How small and what kind of business, and how did they avoid banks?
They didn't avoid banks, they just weren't the banks priority, and there were limited funds so they got left behind. The way it was set up the banks made much more money on much bigger loans, so when it was some Wall Street hedge fund that wanted $750,000 vs Jerry's Pizza which would have gotten $60,000, the big banks went with the hedge funds and their other connected and wealthy customers.
If you remember, big chains like Ruth's Chris and Shake Shack got millions and very few actual small businesses got any at all in the first round.
They didn't avoid banks, they just weren't the banks priority, and there were limited funds so they got left behind. The way it was set up the banks made much more money on much bigger loans, so when it was some Wall Street hedge fund that wanted $750,000 vs Jerry's Pizza which would have gotten $60,000, the big banks went with the hedge funds and their other connected and wealthy customers.
If you remember, big chains like Ruth's Chris and Shake Shack got millions and very few actual small businesses got any at all in the first round.
Well, we're a small town. And we have small town banks, and branches of bigger banks. Sounds like a good portion of our Mom and Pops got help.
Wow! People, take a deep breath here. This is a lot of the same hyperbolic outrage that we heard back in 08'-09' regard the TARP bailouts, and as we all know now, that program actually MADE money for the Treasury Dept. Oh no, BIG BANKS are getting bailed out!! WALL STREET is getting bailed out!! The taxpayers are on the hook for BILLIONS!! IT"S JUST SO DAMNED UNFAIR!!!
Well, most of the banks didn't need the money then either, and they all paid it back, plus billions in so called "dividends" and stock warrants to the Treasury, until the Obama Administration finally decided to allow them to pay it back. That program actually did what it was intended to do, and made the Treasury a tidy profit. So let's just wait a few years and see how this one works about before we all drive over the edge about it, ok??
What you are saying is merely true on paper. The truth is that if you really looked into the numbers you would see just how wrong you are. They legally stole money using that program. The same concept is being used during this pandemic to legally steal even more money.
In the art of war Sun Tzu mentioned that the element of surprise is one of the biggest advantages an army can have. This flows into the concept of the unknown enemy. If you don't know an enemy exists how can you fight him? There is a reason why education of any type has been the target of any intelligent powerful oppressor throughout history. Objective knowledge among the masses is the biggest threat to any illegitimate power structure. The powers that be are using a sophisticated version of that strategy and tricking people into believing what you wrote above.
The first fact about TARP is that it only made money when you don't account for inflation. The "profit" you mentioned amounted to .6% annualized return before accounting for inflation. After accounting for inflation the program lost money. Second fact is that there was no mandate for the businesses receiving the money on how they can spend it. Nor was there a penalty for any misuse since they could spend it however they wanted. Over $5 billion of TARP was used to pay bonuses for employees. Just think about how insane that is. Think of any job on the planet and then ask yourself this question: "in what scenario can an employee mess up on the job, cost the company a massive amount of money but then deserves a bonus despite losing the company money?"
The answer is obviously no job. There is no difference between this example and what was done with the TARP money. There are many ways the government could have used $700 billion to generate a profit and help individual American's. I'm going to use a very simple example. Create temporary jobs that pay at least $50K each with the $700 billion that improves infrastructure, education, health care, public safety etc. Even if every single one of these jobs was created in a state with no state tax and every person taking the jobs were married; the government would still generate a minimum of 13.39% on their money! That's not accounting for state taxes, money spent by these people to buy things, the vast improvement in the quality of life for citizens, the jobs skills that could be used by these people once the temporary jobs were discontinued etc. Remember this is just a dumb basic strategy to use that $700 billion. It could generate vastly superior profits for the government while helping the average American if a proper plan for its use was developed. When you understand how insulting the supposed "profit" TARP generated is and realize how that money could have easily been put to better use; you can see the travesty of these bailouts.
If the businesses receiving TARP wanted to pay the bonus out of their own pockets that is fine by me. But what they did should be a crime. Its no different then someone receiving food stamps using the money to buy luxury food items that are not allowed to be purchased with food stamps. So yes TARP was an outrage just like the current "bailout" or should I say the legal theft of billions from US citizens?
Last edited by griffon652; 07-29-2020 at 03:28 AM..
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