Economic Effect

[Doggin94it]

On 5/9/2020 at 9:46 AM, CTM said:

So PPP makes sense, give small businesses money to stay afloat and keep paying employees. Unemployment too, not to the level they have where its uncapped but fed unemployment was needed.

I'm asking about large stimulus checks to people unimpaired economically. What is the arguement for issuing them. Unemployment isnt an answer as its covered above.

 

 

You claw back in taxes from the people who didn't need it. It basically becomes an interest free government loan, because it's impossible to target correctly on the front end

[Doggin94it]

27 minutes ago, Lot K Tailgaters said:

I didn’t even realize this thread existed.  I used to just read the Jets board and recently discovered the now locked Covid thread.  
 

I’m a financial advisor so the past couple of months have been chaotic to say the least. 

While I don’t want to say anything controversial here I think our country needs to teach kids some basic things about finance before they graduate HS.  There are so many people who aren’t prepared for even a basic emergency.  Sometimes it’s because they aren’t paid enough but many times it’s because they just don’t think about it.  So many people who appear wealthy with a nice car and house but have debt and are in over their heads.  Also so many younger people are afraid to invest.  
 

The PPP loans have been a mess.  A lot of laid off employees are making more on unemployment than they did working so sometimes the employer looks like the bad guy paying their employees not to work or calling them back to work.  Also independent contractors are eligible and most are 1099 and don’t have a business so banks are giving them a hard time to get one.  After things calm down I’m moving my bank accounts to a community bank because they treat their customers MUCH better.  
 

When things recover they will be VERY different in my opinion.  I keep reading about businesses who will have employees work from home permanently. I read and article that businesses save $11k a year per employee when they work from home.  I’m interested to see how commercial landlords handle things.  If a business hasn’t been able to pay rent because they are closed down does the landlord try to evict them and hope to find a new tenant or maybe waive some of what is owed since it may be hard to find a new tenant?   Also while I’m now a lawyer I think some businesses will have a pandemic or emergency clause.  I’ll use daycare as an example.  I’m mad my son’s daycare won’t refund me the second half of March.  They have billed me since then.  I know many daycares who refunded or credited the second half of March.  Some have contributed to bill parents full cost or a percentage.  I wouldn’t be shocked to see them re open with an agreement that in another situation like this parents have to continue to pay.  

Goddamn lawyers. ?

What's your practice

[CTM]

41 minutes ago, Doggin94it said:

You claw back in taxes from the people who didn't need it. It basically becomes an interest free government loan, because it's impossible to target correctly on the front end

It's a credit, not a deduction.

[southparkcpa]

4 hours ago, Lot K Tailgaters said:

I didn’t even realize this thread existed.  I used to just read the Jets board and recently discovered the now locked Covid thread.  
 

I’m a financial advisor so the past couple of months have been chaotic to say the least. 

While I don’t want to say anything controversial here I think our country needs to teach kids some basic things about finance before they graduate HS.  There are so many people who aren’t prepared for even a basic emergency.  Sometimes it’s because they aren’t paid enough but many times it’s because they just don’t think about it.  So many people who appear wealthy with a nice car and house but have debt and are in over their heads.  Also so many younger people are afraid to invest.  
 

The PPP loans have been a mess.  A lot of laid off employees are making more on unemployment than they did working so sometimes the employer looks like the bad guy paying their employees not to work or calling them back to work.  Also independent contractors are eligible and most are 1099 and don’t have a business so banks are giving them a hard time to get one.  After things calm down I’m moving my bank accounts to a community bank because they treat their customers MUCH better.  
 

 

Yeah me too, I am a CFP as well as CPA , manage assets as well as do the tax work for many clients.  While I agree in general, pretty much all of my business clients got the PPP loan and i don't see any of them having to pay it back.  Meeting the 75/25 payroll to overhead rule is not too difficult, So as least they all got their money.  When this crisis happened, I lterally liquidated every client to about 25 percent cash and then bought them a 10 percent position in Amazon somewhere in the $2,000 point in March.  Not a stock picker, we use Vanguard mainly BUT this has done well for us.

[JetPotato]

Got a PPP loan, and not looking at it as anything other than a loan. The "forgiveness" part of it is an absolute joke for many businesses, including mine.

1) Even during normal operation, payroll is no where near 75% of our expenses. Rent/CAM account for over 50%. Payroll is more like 35-40%.

2) For forgiveness, I have to spend it 8 weeks from the time I receive the loan (not from when you open the business, which would have been the not-moronic thing to do). I received the funds two weeks ago, but our doors are still closed. We aren't the kind of business where any employee can work from home, and there's no such thing as curbside pickup for what we do. I have ZERO revenue, and there's no end in sight. My type of business in Bergen County, NJ isn't opening any time soon. Not within those 8 weeks, anyway. So go pound sand on telling me when I can spend it.

3) You'll say "pay your employees and it will be forgiven". Dumb. My employees don't want to be paid by me. They are all making more on unemployment while sitting at home doing nothing. There's zero advantage to them or to me to pay them now. I'll use the capital when I need to when (if) we open on trying to catch up on the rent. Not going to spend it for the sake of having it forgiven. If I'm throwing the money away, I might as well then just return the loan. I'll hold on to it instead, with no hope of forgiveness.

Overall, one of the most poorly constructed, idiotic, worthless pieces of legislation of all time, and they all think they're heroes for passing it.