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Here are my quick thoughts on how we’ve arrived at such a dismal place on small business relief. 1/ https://twitter.com/lettieridc/status/1304079754514096128
First, policymakers have simply been unwilling to accept the true nature of the problem. The CARES Act was premised on the idea that this would be a short, punctuated crisis. Even after it became painfully clear that this was wrong, Congress failed to adjust accordingly. 2/
Next, path dependency. PPP was an effective, if flawed, way of blunting the initial crisis and buying time — not a program designed to be the long-term solution. But it became the default mode of relief in spite of being obviously mismatched to the task at hand. 3/
Third, due to its grant-like structure, PPP was an enormously expensive way to support vulnerable businesses. Its $500B+ price tag (and controversial implementation) eroded the political willpower necessary to continue providing large scale relief. That ship has sailed. 4/
Fourth, and related, there is an influential minority in Congress who believe we have spent far too much already, and that we simply need to get out of the way of the recovery. They point to the latest headline jobs numbers as evidence. Sigh. 5/
Fifth is, of course, election year partisanship. Enough said about that. 6/
Last, but perhaps most inexcusable: there has never been a coherent small business relief *strategy* since the crisis began. Never. It’s been all short-term, tactical thinking beholding to a dysfunctional political environment. 7/
And that, my friends, is how we spent half a trillion dollars to allow small businesses to take *one* loan equivalent to 10 weeks of payroll expenses, and then wish them good luck surviving a crisis now stretching into its seventh month. /end
