The New York Times’s Ben Casselman and Jim Tankersley report that — while politicians on both sides of the aisle have backed the Paycheck Protection Program of forgivable loans to small businesses — economists have a decidedly less rosy view of its success:
“Academic economists who have studied the program have concluded that it has saved relatively few jobs and that, at a cost of more than half a trillion dollars, it has been far less efficient than other government efforts to help the economy.
“’A very large chunk of the benefit went to a very small share of the firms, and those were probably the firms least in need,’ said David Autor, an M.I.T. economist who led one study.
The Trump Treasury Department claimed that the program supported more than 50 million jobs and may have saved 1.86 million, but Autor’s study found that the program saved far fewer positions, between 1.4 million and 3.2 million. Other studies have come up with similar numbers.
“Given the program’s cost, saving jobs on that scale doesn’t necessarily qualify as a success,” Casselman and Tankersley say. “Unemployment benefits also provide income, at far less expense, and programs like food assistance and aid to state and local governments pack a larger economic punch, according to many assessments.”
Other experts say that the program should be judged not by the number of jobs saved, but by the number of businesses it kept alive, and that by that measure it was a success, especially with the smallest of businesses.
“You can’t look at cost per job saved,” Glenn Hubbard, who served as chairman of the Council of Economic Advisers under President George W. Bush, told the Times. “It wasn’t the goal. The goal was preserving businesses.”
