Cards as an inflation hedge ?

[Wanaselja]

Originally Posted by Johnny630

This PPP Stimulus money that was handed out to businesses I was just wondering do the businesses have to pay this back? If so how much time do the have to pay said back and at what interest rate??

If the money was used for what it was intended (payroll mainly) and you meet other criteria (retaining your employees etc) the loan is forgiven.

[Peter_Spaeth]

Originally Posted by Wanaselja

If the money was used for what it was intended (payroll mainly) and you meet other criteria (retaining your employees etc) the loan is forgiven.

So if the government gives you a million that you didn't need, you spend it on payroll, and then take the million you would have spent on payroll and buy cards, the government essentially has bought your cards for you.

[ullmandds]

Originally Posted by Peter_Spaeth

So if the government gives you a million that you didn't need, you spend it on payroll, and then take the million you would have spent on payroll and buy cards, the government essentially has bought your cards for you.

i personally don't know anyone who bought cards with this $$$$$...I just assumed people did seeing as the people I do know spent theirs on porsches!

[Peter_Spaeth]

Originally Posted by ullmandds

i personally don't know anyone who bought cards with this $$$$$...I just assumed people did seeing as the people I do know spent theirs on porsches!

How do they justify that?

[ullmandds]

Originally Posted by Peter_Spaeth

How do they justify that?

its just like the example given...my company gave its owners huge bonuses with the ppp money...another friend i know who has has his own practice got lots of ppp money that was forgiven and ended up with a lot of it.

I also did not get a penny of free money but it seems many did who didnt need it.

[Wanaselja]

Originally Posted by Peter_Spaeth

So if the government gives you a million that you didn't need, you spend it on payroll, and then take the million you would have spent on payroll and buy cards, the government essentially has bought your cards for you.

Yes. With the big assumption that it wasn’t needed. Every time there is federal aid doled out people tend to focus on the small percentage of people/businesses that abuse the aid rather than the larger majority that need and benefit from it. While some abused the PPP funding I’d be willing to bet that the businesses it helped keep afloat far outnumber the abusers.

[Wanaselja]

I would also say that unless you own/owned a small business in Feb/Mar of last year you can’t possibly understand how frightening things looked. Especially small businesses just getting their feet under them.

[Peter_Spaeth]

Originally Posted by Wanaselja

Yes. With the big assumption that it wasn’t needed. Every time there is federal aid doled out people tend to focus on the small percentage of people/businesses that abuse the aid rather than the larger majority that need and benefit from it. While some abused the PPP funding I’d be willing to bet that the businesses it helped keep afloat far outnumber the abusers.

Yes I agree but at the same time that doesn't trivialize the abuse or the lack of ethics.

[Wanaselja]

Originally Posted by Peter_Spaeth

Yes I agree but at the same time that doesn't trivialize the abuse or the lack of ethics.

Certainly doesn’t. But that narrative focus tends to make people anti federal help when at times it is essential even if there are those that will take advantage.

[Johnny630]

Originally Posted by Peter_Spaeth

So if the government gives you a million that you didn't need, you spend it on payroll, and then take the million you would have spent on payroll and buy cards, the government essentially has bought your cards for you.

Quite the Rip Off isn't it? What Dopes in our Federal Government.

[ajjohnsonsoxfan]

Originally Posted by Johnny630

Quite the Rip Off isn't it? What Dopes in our Federal Government.

All in all, I think the government did a pretty remarkable job given the circumstances in 2020/2021 to safeguard individuals and small business and keep the economy humming. There would have been no way to vet everyone in a timely manner to get the money out to make a difference. The blanket strategy was the only way it could have gone. We'd be in a far worse spot right now if no stimmy was given.

[BobC]

There have already been people convicted of abusing the PPP program and now facing/serving prison time, and will likely be more to come. And for a lot of you with criticisms and complaints about what was and wasn't done, isn't it wonderful how 20/20 hindsight is always so much clearer than facing the unknown future in a totally unprecedented worldwide situation that descended upon all of us so fast, it made it seem like it all happened virtually overnight.

The main goal was to keep the U.S. economy going despite the pandemic, and in reality, based on where we are today and after all the problems and issues that have occurred since this all began (as many of you naysayers are so dutifully pointing out), we sure as heck could be in a lot worse shape.

Initially the loans were to try and keep as many as possible people working, getting paid, and then spending their money so the economy wouldn't falter. Not knowing how things would turn out, both government and businesses were guessing as to who may or may not need the stimulus money. So if it ended up that some businesses got PPP loans they ultimately seemed to not need, the government wanted them to have it anyway so they'd continue to spend the money on whatever, even if it ended up being on baseball cards. That's the only way to keep the economy going, by having people continue to spend money. Because of the quarantines and shutdowns, the government knew certain industries, jobs, and businesses where going to get whacked more than others, and there was no way they'd be contributing to the economy like they had been. In which case, you would expect the government to be praying these more fortunate people and businesses not feeling the pressure of the pandemic as much, would spend even more of the stimulus money they were getting to hopefully make up for lost economic activity of the unfortunate businesses and people that did get whacked because of Covid.

It was a deliberate and calculated move by the government to give businesses this extra money to spend. I don't know how many of you realized that when the PPP loan forgiveness program was first put into operation, the IRS advised businesses that according to then current tax laws, none of those payroll or other expenses deemed as being paid by the PPP loan proceeds, and then forgiven, would be tax deductible. The government specifically made sure to enact and have signed into law, new legislation so that those forgiven expenses would absolutely be tax deductible. Had the government not done this, businesses and business owners would have been forced to not spend a significant amount of the PPP loan stimulus money they received, and instead hold on to it in contemplation of sending it right back to the government as taxes. And that would have succeeded in significantly crippling the government's main reason for having given out the PPP money in the first place, to stimulate the economy. Why do you think all these various payments, loans, and programs were always referred to as "stimulus" money.

So for those people/businesses possibly being accused of not being of high moral or ethical character for having taken PPP loan money they were eligible for (or any other stimulus moneys for that matter) that it turned out they may not have needed to survive the pandemic after all, and then had the loan forgiven, take heart. You are not bad at all. In fact, the government was totally behind in encouraging and aiding everyone to getting as much stimulus money and aid as they could, so they in turn could spend as much as possible to keep the U.S. economy flowing.

We're still not out of this Covid pandemic yet either. So for all you critics against those who legitimately got and are spending their stimulus money, quit complaining and apparently advocating to potentially damage our economy instead. Maybe you should all take a page out of the old carpenter's handbook, but instead of remembering to measure twice and then cut once, you should all think twice, before speaking even once.

[Leon]

Originally Posted by BobC

There have already been people convicted of abusing the PPP program and now facing/serving prison time, and will likely be more to come. And for a lot of you with criticisms and complaints about what was and wasn't done, isn't it wonderful how 20/20 hindsight is always so much clearer than facing the unknown future in a totally unprecedented worldwide situation that descended upon all of us so fast, it made it seem like it all happened virtually overnight.

The main goal was to keep the U.S. economy going despite the pandemic, and in reality, based on where we are today and after all the problems and issues that have occurred since this all began (as many of you naysayers are so dutifully pointing out), we sure as heck could be in a lot worse shape.

Initially the loans were to try and keep as many as possible people working, getting paid, and then spending their money so the economy wouldn't falter. Not knowing how things would turn out, both government and businesses were guessing as to who may or may not need the stimulus money. So if it ended up that some businesses got PPP loans they ultimately seemed to not need, the government wanted them to have it anyway so they'd continue to spend the money on whatever, even if it ended up being on baseball cards. That's the only way to keep the economy going, by having people continue to spend money. Because of the quarantines and shutdowns, the government knew certain industries, jobs, and businesses where going to get whacked more than others, and there was no way they'd be contributing to the economy like they had been. In which case, you would expect the government to be praying these more fortunate people and businesses not feeling the pressure of the pandemic as much, would spend even more of the stimulus money they were getting to hopefully make up for lost economic activity of the unfortunate businesses and people that did get whacked because of Covid.

It was a deliberate and calculated move by the government to give businesses this extra money to spend. I don't know how many of you realized that when the PPP loan forgiveness program was first put into operation, the IRS advised businesses that according to then current tax laws, none of those payroll or other expenses deemed as being paid by the PPP loan proceeds, and then forgiven, would be tax deductible. The government specifically made sure to enact and have signed into law, new legislation so that those forgiven expenses would absolutely be tax deductible. Had the government not done this, businesses and business owners would have been forced to not spend a significant amount of the PPP loan stimulus money they received, and instead hold on to it in contemplation of sending it right back to the government as taxes. And that would have succeeded in significantly crippling the government's main reason for having given out the PPP money in the first place, to stimulate the economy. Why do you think all these various payments, loans, and programs were always referred to as "stimulus" money.

So for those people/businesses possibly being accused of not being of high moral or ethical character for having taken PPP loan money they were eligible for (or any other stimulus moneys for that matter) that it turned out they may not have needed to survive the pandemic after all, and then had the loan forgiven, take heart. You are not bad at all. In fact, the government was totally behind in encouraging and aiding everyone to getting as much stimulus money and aid as they could, so they in turn could spend as much as possible to keep the U.S. economy flowing.

We're still not out of this Covid pandemic yet either. So for all you critics against those who legitimately got and are spending their stimulus money, quit complaining and apparently advocating to potentially damage our economy instead. Maybe you should all take a page out of the old carpenter's handbook, but instead of remembering to measure twice and then cut once, you should all think twice, before speaking even once.

The government has given out too much free money. It has bad side effects.
.

[Johnny630]

Originally Posted by Leon

The government has given out too much free money. It has bad side effects.
.

100% agree

[Wanaselja]

Originally Posted by Leon

The government has given out too much free money. It has bad side effects.
.

I suppose it depends on what end of the economic spectrum you’re on. I’m sure there are many in need that are thankful.

[BobC]

Originally Posted by Leon

The government has given out too much free money. It has bad side effects.
.

Leon,

Maybe yes, maybe no. But to keep stimulating the economy and have it keep going so it didn't collapse, that was the main concern. I'm sure a lot of people in the government were looking back to the 2008 economic collapse and thinking, "We're going to have this again AND a health crisis, at the same time?".

We don't know what may have happened had the government done nothing. Of course now we've got a record amount of national debt we're sitting on, an infrastructure that definitely needs maintenance and updating, more expenses and costs we're going to continue to incur and see coming in regards to all the energy and global warming issues, and rising inflation and costs everywhere, coupled with supply chain issues and shortages around the globe. And this pandemic and how that all eventually plays out still isn't known yet.

We're going to be feeling something from this alright, like with all these tax laws changes already occurring that are being made to try and bring in more tax dollars to pay for everything. But in regards to the economy itself, there's even been talk about bringing back more stimulus payments to individuals now. Which just goes to show how worried the government may still be about the overall economy going forward. At least the government is doing something to try and keep things going well in regards to the economy. Would you really rather they do nothing at all and let the fate of our economy be left solely in the hands of Wall Street and the business leaders in this country, and trust they'll somehow band together to put their interests on the back burner to look out for everyone else in all this? And think about that extra hard before you answer!

My gripe was with the people talking about the businesses getting PPP money that may have ended up not needing it to survive the pandemic after all, and how therefore, they were somehow morally or ethically wrong. They were only doing what the government wanted and felt they needed them to do to keep that economy going. If they want to blame someone, blame the government maybe, but why blame the businesses? But before you start blaming the government so much, what would you rather they had done instead? Who knows? But at least for where we are right now after almost two years of this pandemic, we sure could be a lot worse off. Enough of my crap............

[egri]

Originally Posted by Leon

The government has given out too much free money. It has bad side effects.
.

Out of my parents, my sister and me, I have the most stable income by far (military; I get paid unless there’s a government shutdown where the DoD isn’t funded), and I was the only one who received all three of the stimulus checks.

[Peter_Spaeth]

Again I am no socialist, but handing massive sums of money out to the wealthy and encouraging them to spend it on luxury goods doesn't seem like the most efficient way for a government to stimulate the economy in a way that benefits the people who are most in need. Small businesses teetering on the brink, trying to keep their people working, a different matter. Anyhow Ryan, shame on you for not taking the money, you didn't do your part.

[BobC]

Originally Posted by Peter_Spaeth

Again I am no socialist, but handing massive sums of money out to the wealthy and encouraging them to spend it on luxury goods doesn't seem like the most efficient way for a government to stimulate the economy in a way that benefits the people who are most in need. Small businesses teetering on the brink, trying to keep their people working, a different matter. Anyhow Ryan, shame on you for not taking the money, you didn't do your part.

Peter, I don't disagree with you at all, but when does the government ever seem to get anything completely right? LOL I was in the middle of all this crap with multiple clients, and nobody really knew what was going on from day to day. The government kept trying to adapt and keep up with ever increasing demands and issues from the pandemic's effect on the country overall, and was doing the best they could on the fly. And thank God they did something. Business owners I and colleagues dealt with didn't know what was going to happen, and many were running scared. With the imposed lock downs and quarantines, a lot may have just decided to close the doors and send people home. Which would have vastly increased the number of people getting on unemployment. That's one thing many people never even thought about, without the PPP loans keeping people working, the unemployment costs would have skyrocketed even more. So the government would have likely ended up paying out hundreds of billions of dollars whether they did it by PPP loans or not.

Those PPP loans gave a lot of businesses the economic cushion and confidence they needed to keep their doors open, keep people working, and keep the products and services they provided to the populace flowing. The vast majority of businesses in this country are small, closely held businesses. And they in turn employ a vast majority of the workers as well. Don't forget, PPP loans weren't available to the huge public companies with thousands and thousands of employees. They were specifically geared towards those smaller, closely held companies. And owners of such smaller, closely held companies were much more likely to simply shut down their businesses entirely rather than try to keep them going and maybe run up their business losses and debt (or personal losses and debt as well), to the point they'd go under anyway. This would just permanently displace even more workers into the ranks of the unemployed, and remove even more goods and services such now closed companies would have otherwise been providing to the marketplace.

Those PPP loans gave many, many business owners that cushion and safety net they needed to keep things going. And that was vital to help keep the economy going.

And those extra dollars weren't all spent on Porsches and baseball cards. I would imagine a majority of such excess dollars going to pay down business debts, hiring additional workers, funding expansion and/improvements, covering costs related to more remote working and accessibility, and on and on. And some of it was probably put aside as well as savings for a rainy day, since we still haven't seen the end of the pandemic yet. Was how things done possibly inefficient, hell yeah! What would you expect when everyone was running around like chickens with their heads cut off as the pandemic was raging? But when is our government ever really efficient? It's a "bureaucracy", which I've always thought of as a synonym for "wasteful". LOL Again, at least our government did something that likely needed to be done.

[carlsonjok]

Originally Posted by Peter_Spaeth

Again I am no socialist, but handing massive sums of money out to the wealthy and encouraging them to spend it on luxury goods doesn't seem like the most efficient way for a government to stimulate the economy in a way that benefits the people who are most in need. Small businesses teetering on the brink, trying to keep their people working, a different matter. Anyhow Ryan, shame on you for not taking the money, you didn't do your part.

My clear recollection from when I was working on my MBA was an economics professor saying just this. If you want to use government spending to stimulate an economy, you create more velocity of money by giving it to those most likely to spend it: the working and middle classes. The renters and not the rentiers, if you will.

EDIT: To be clear, the PPP program did work towards this end by helping businesses maintain payroll. But, anytime you filter money through intermediaries, there is going to be shrinkage and opportunities for fraud.

[BobC]

Originally Posted by ajjohnsonsoxfan

All in all, I think the government did a pretty remarkable job given the circumstances in 2020/2021 to safeguard individuals and small business and keep the economy humming. There would have been no way to vet everyone in a timely manner to get the money out to make a difference. The blanket strategy was the only way it could have gone. We'd be in a far worse spot right now if no stimmy was given.

+1

AJ, glad to see you get it.

[Mark17]

Originally Posted by ajjohnsonsoxfan

All in all, I think the government did a pretty remarkable job given the circumstances in 2020/2021 to safeguard individuals and small business and keep the economy humming. There would have been no way to vet everyone in a timely manner to get the money out to make a difference. The blanket strategy was the only way it could have gone. We'd be in a far worse spot right now if no stimmy was given.

And the national debt only increased by 5 trillion dollars.

With impending inflation, spurred by this massive infusion of newly created dollars, the interest we'll be paying on the pre-existing debt, plus the interest on this new 5 trillion debt, will be a hefty burden on our federal budget forever.

Or, until our currency collapses under the weight of all this reckless debt.

[Peter_Spaeth]

Originally Posted by Mark17

And the national debt only increased by 5 trillion dollars.

With impending inflation, spurred by this massive infusion of newly created dollars, the interest we'll be paying on the pre-existing debt, plus the interest on this new 5 trillion debt, will be a hefty burden on our federal budget forever.

Or, until our currency collapses under the weight of all this reckless debt.

As Kissinger famously said, the future has no constituency.

[Johnny630]

I for one think inflation will not be as bad as some have forecasted I say we peak mid q2 this year.

[Wanaselja]

Additionally, you needed to qualify for the PPP funding by demonstrating a % of loss in revenue from preceding quarters.