PPPARTY TIME!(ECONOMICS)

• Author: Britschgi, Christian

ALTHOUGH IT DIDN'T technically qualify for aid, carmaker Lamborghini has benefitted from the Paycheck Protection Program (PPP), the federal government's $670 billion effort to save distressed small businesses during the COVID-19 pandemic.

Within days of receiving $1.6 million in PPP loans for his construction and logistics businesses, Lee Price III of Houston bought himself a 2019 Lamborghini Urus for $233,337, plus a $14,000 Rolex watch and close to $5,000 worth of entertainment at a strip club and various bars around town. In early August, the Department of Justice (DOJ) filed fraud charges against Price for allegedly filing applications with banks claiming fictitious payroll expenses in order to qualify for a PPP loan.

His scheme was audacious but hardly original. The DOJ had already brought similar fraud charges against Miami man David T. Hines, who had allegedly spent his ill-gotten PPP loans on a new $318,000 Lamborghini Huracan EVO.

These purchases, needless to say, were not what Congress had in mind when it created the PPP as part of its $2.2 trillion Coronavirus Aid, Recovery, and Economic Stability (CARES) Act in March. The program was supposed to keep small businesses afloat by offering them loans that would be forgiven on the condition that most of the money was spent retaining staff.

While the program has been a lifeline for many businesses that were forcibly closed by stay-at-home orders (and have since had to contend with anemic demand and extensive social distancing regulations), PPP loans seemingly went to a lot...