Economic Stimulus a Pipe Dream

Economic Stimulus a Pipe Dream

Small business, government-backed funding continues to be an economic stimulus pipe dream. As we enter day 26 of the New Jersey quarantine directive, small businesses are making zero money and the government clearly does not understand the need at which fiscal policy needs to be mobilized. Could you imagine if this was indeed the wartime effort lawmakers keep referencing? Iran bombs one of our bases overseas and we take a month to respond? It would be treason.

We allow this virus to enter our shores unimpeded, close down 50% of our economy, infect half a million people and…nothing. No ventilators for the sick, no masks for the men and women on the front lines, and no economic relief for everyone else on the sidelines. 

Banks Unwilling to Help with Stimulus

Earlier today the Washington Post published an article titled, “Big banks took ‘free money’ in 2008. They’re turning their backs now on small businesses, SBA official says.” by Aaron Gregg and Renae Merle. Within the article there is a video embed showing a Zoom call between bank executives and SBA Nevada district director Joseph Amato.  Within the call you begin to understand the frustrations of those who take their jobs very seriously.

While Joseph Amato is still being paid via his position at the SBA he clearly understands the needs of small business owners and entrepreneurs throughout the country.  At one point he is heard referencing the Payroll Protection Program (PPP) saying, “It just comes down to … the same banks that literally took billions of dollars with one page from then-Treasury Secretary Henry Paulson are the ones saying the documentation isn’t clear enough for them.” 

This type of bureaucratic red tape is specifically the reason the United States is suffering a economic stimulus pipe dream and will suffer an economic doom loop as discussed in an earlier post. This is going to result in a severe economic downturn for an extended period of time, likely 18 months if not longer.  This projection may change as we better understand how long this pandemic protocol will last. Likely, as certain states/areas begin to come through the virus, others will only just begin to experience it. This time lapse will add duration and magnitude to the underlying economic impact of this Coronavirus crisis too.

Neither PPP or EIDL Programs Working to Help Small Business

Alongside the PPP there is also no information available regarding the Economic Injury Disaster Loan (EIDL).  Having applied over three weeks ago, there has been no correspondence outside of one early emailed request that I resubmit my application on the new form. Speaking with other entrepreneurs via telephone, Zoom, and various Facebook groups it does not appear that anyone has any further information either. The idea of a $10,000 advance provided a momentary sparkle of hope that perhaps our leaders in Washington understood the potentially devastating impacts of an extended business closure.

The reality is this economic stimulus pipe dream has been underscored by exceptionally long wait times and uncertainty that leaves everyone involved anxious and fumbling to decide the best course of action. The President has been on television multiple times asking business owners not to lay people off. Keep people working. Find ways to pay and the government will get you help.  As we prepare to cross a month long quarantine no one has any money to spare. Business owners have spent money paying people that they likely shouldn’t have paid, because they will be unable to recover it, while employees who should have filed for unemployment, haven’t because they have continually been promised paychecks that have yet to be realized. 

The Death of Americans or the Death of America?

This economic stimulus pipe dream is exacerbated by the ever changing Coronavirus health response without the same ever changing Coronavirus economic response. Initially it appeared perhaps leaders did not think the situation would become as dire as it has. It was going to be a small hiccup, a blip on the radar, but it has blown up into something far worse. As with both issues, the health crisis and the economic impact, lawmakers were not able to maneuver or pivot fast enough to keep up with events. Soon after addressing the nation, asking small businesses to keep people employed, we should have called an audible, or an about-face and simply told businesses to shutter their doors, hunker down, and let their employees file for unemployment. The ability to forecast and recognize the probable outcome is a relevant skill to have in such an environment. 

Small businesses continue to wait for funding and expectations moving forward. With news articles abound discussing and describing the economic turmoil, the unpreparedness, and the unwillingness to make relief happen I would like to see the White House step forward.  We funded a wall faster than we are funding this. How can that be?

Leave a Reply