I am not commenting on whether or not they should have been. I am not interested in tying them back to discussion of any other loans or loan forgiveness.
Why call them loans if they are not?
In: Economics
They were technically loans. The contracts specifically said they were loans that would be payed back. Congress merely had the option to forgive those loans.
Because you did have to pay them back if you didn’t meet the simple requirements that were set out. And a grant or a handout is impossible to claw back if they don’t meet those requirements. Meanwhile a loan is designed to be paid back so it’s easy to get that money back if they don’t meet the requirements. Short answer, canceling a loan that meets the requirements for forgiveness is much easier than trying to get a handout back that didn’t meet the requirements.
The small company I work for got one of these. There was a ad rush to them and they ran out of funds quickly. There was a general understanding at the time that you wouldn’t need to pay it back. Officially you could only keep it if you didn’t lay off any employees but nobody checked.
By calling them loans the GOP could pull the wool over the eyes of their base for massive handout to the wealthiest people.
I strongly suspect that it was a budget accounting issue. Categorizing them as loans allows the government to pretend they will be paid back in full, and not count against the cost of the program.
More importantly why can’t we sue the US Government for forgiving them the way Biden is sued for forgiving Student Loans?
Because if they had announced free handouts for business owners and CEOs in the middle of a pandemic, people would legitimately have rioted.
Think of them more as PPP “Grants” than loans. It helps with people who didnt meet the restrictions that they would have to pay them back, and not blind side them.
My state had whats called a “Cancelable student loan” for national guard soldiers. If you made a C or higher in the class, you didnt have to pay the loan back. But if they called it a grant, people would assume they would never have to be paid back even if you made an F
This is a leading, dishonest question.
The reason why it’s called a *loan,* is because the money would be put back into the economy. People will pay their rent, pay for groceries and put money into circulation.
People can’t spend if they’re dying of starvation or dying on the streets.
Fun fact: SNAP, formerly known as food stamps pays for itself, by stimulating on average 1.50 in spending for every dollar spent on the program. Some states, that number’s close to 2$. It’s the most effective means of economic stimulus the government has at its disposal. You can also buy seeds with SNAP benefits because it’s managed by the US Agriculture bureau and was intended to help poor farmers and miners. John F. Kennedy actually was a proponent of this idea, as an expansion to commodity foods, to let households instead decide how to best shop for food.
Why was the Patriot Act called The Patriot act?
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