I feel it’s worth pointing out that saving people from financial ruin was only part of the intent of the PPP legislation. The main point of a “stimulus” is to stimulate the economy. If your friend received money and then spent it on something, the legislation essentially worked as intended.
It was not sold as a stimulus, it was to allow businesss to pay furloughed employees (in a bizarre ill-thought-out privately-run unemployment insurance scheme) to continue to pay ongoing expenses.
What didn't make sense, of course, is what those people were supposed to be buying, since the reason they were furloughed was because.... people weren't buying things, because of lockdowns and such. Hence, inflation when aggregate $ exceeded stuff worth buying.
> It was not sold as a stimulus, it was to allow businesss to pay furloughed employees (in a bizarre ill-thought-out privately-run unemployment insurance scheme) to continue to pay ongoing expenses.
Can you clarify what's your rationale for believing that a program designed to "allow businesss to pay furloughed employees (...) to continue to pay ongoing expenses" does not correspond to an economic stimulus program?
It was not to pay furloughed employees, it was to avoid having to furlough or lay off more employees than they did anyway. Furloughed employees did not get paid, but retaining a certain percentage of pre-pandemic headcount was a requirement for the loan to eventually be forgiven.
Source: I was furloughed April 2020 while my employer at the time received over $2m in PPP. Furloughed employees were explicitly told to collect UI.
If they spent the extra money on secondary-market financial investment (like stocks or crypto), propping up asset prices, then that seems like it goes against the stimulus that the program wanted, which was to keep steady sales for otherwise reliable businesses.
Inflation is hitting most countries aggressively now. The US may actually be on the conservative end of inflation which may have been buffered using government subsidies/influence, but the net takeaway is the rapid expansion in the world can't be explained by simply looking at the US's free-money-keep-buying scheme.
The graph shows until this Feb. JPY has been plunged about 13% recently, and even without it import energy/food/everything price is increasing for obvious reason. Let's see whether salary catch up (I doubt).
