PPP Underfunded & Unavailable

Have you filed your Payroll Protection Program Application (PPP)? Expect to wait. Currently the PPP is underfunded and basically unavailable. How are you planning to deal with the increasingly long waiting period we all expect to experience?  

The payroll protection program continues to be another bureaucratic disaster filled with a lot of paperwork and few answers.  The PPP is Underfunded. Earlier today the Treasury Secretary formally asked Congress for an additional 200 billion dollars to eventually disperse to small businesses, recognizing the PPP is underfunded. The title of the article published in the Washington post and written by Laura Litvan, Saleha Mohsin, and Billy House is, “Treasury seeks $250 Billion More for Small Business  in 71% Boost.” The idea that Washington was not even remotely able to determine the amount of money needed for small business is concerning. The program continues to drag on with a variety of banks all offering the same explanation of, “waiting on more information,” funds sit in limbo while small businesses begin to perish and die. 

PPP Underfunded and its relationship to Monetary Policy

Clearly the concern for monetary policy and financial oversight has been thrown completely out the window. Why does the government continue to push the use of intermediaries when the situation is dire and the desired results continue unaccomplished. Elected leaders continue to discuss the idea of war like efforts, however battlefield tactics and strategies can change tremendously as results and information become available. The United States does not appear to be addressing the Pandemic in the same way. At least not economically. If the PPP is underfunded & unavailable, lets address this at its face.

Monetary vs. Fiscal Policy. The Fiscal Fight Continues. Realizing PPP is Underfunded.

In seeking to fund the drastically underfunded PPP, House Speaker Nancy Pelosi spoke with CNN alluding to the idea that members of the Democratic party may want to push for more assurances, protections, and oversight of the dollar allocations from the PPP prior to approving extra funds to the program.

Without becoming partisan, and certainly recognizing the desire to ensure funds are used appropriately, the program cannot wait. The American economy is in an unprecedented downward spiral and money needs to be injected into the economy yesterday. Others may disagree, but small business funding and stimulus is the most important facet of the economy at the moment. 

Balancing Health & Economics

As mentioned in a previous post, small business in the United States represents 50% of gross domestic product (GDP). The effects of shelter-in-place directives and closure of ‘non-essential’ businesses has crippled the economy. Not to downplay the health effects of this virus, clearly this is the epicenter of the problem, yet in a capitalist society, one is forced to beg the question, what business is ‘non-essential?’  Does the government have the right to negatively impact someone’s livelihood at the expense of public health? Clearly the answer is yes. Without a public, business will not function. However it seems to require a serious evaluation of how we qualify this decision and when, to some degree, the public also has to accept some responsibility as well. 

As we continue to fight this virus together there are unfortunately groups of people who will suffer in various capacities. Those who fight for health, those who fight financially, and those who will fight both battles. While we have realized, and are now working to combat our unpreparedness for such a pandemic, hopefully as a nation, our elected leaders especially, have begun planning for the carnage that will take place once the health scare has come under control.

The financial burden many will bear is going to severely strain the economy and we should be working two-fold now to avoid a financial crisis immediately following the health crisis. A large portion of this two-fold fight can be won right now by providing small business relief swiftly. This means getting the PPP from Underfunded & Unavailable to properly funded and accessible.

The Coronavirus response is unprecedented

The Coronavirus situation is a unique space in our history as a nation. While small businesses fail everyday, that is an inherent risk of entrepreneurship. The marketplace is competitive and only the strongest, smartest, and most efficient survive. However, as a nation we have never been asked to stop work and not offer an alternative. Wartime may send men and women to war, but they get paid for war. The home economy typically still works well as the communities support the needs of men and women overseas. This scenario is unique. The idea here is not to push production and productivity to its limits, but to lessen productivity and production to almost nothingness. 

The medical professionals of government are doing a good job on their front, but we need to look at constituent welfare via the economy as well. Let’s bring our economists to the table. Let’s bring our military leaders to the table.  We need the financial sense and the mission accomplishment incorporated into this fight immediately. Eliminate the money intermediaries. Stop asking small businesses to fund unemployment and stop asking banks to facilitate loans. Get funds disbursed to small businesses first and do this instantly.

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