Small businesses are the backbone for job creation in the economy. It is thus commendable that an important part of the government’s $2 trillion stimulus package to tackle the economic downturn caused by the coronavirus and the COVID-19 illness is the Paycheck Protection Program (PPP) — a $349 billion program targeted at small businesses that launched Friday.

Even if ambitious relative to past stimulus packages, the Paycheck Protection Program is not large enough to cover operating costs for all small businesses given the scale of the present disruption. In reality, there isn’t enough money to meet even the eight-week forgivable payroll option, never mind everything else in the bill. Therefore, it is essential to ensure the program reaches the borrowers most in need.

To have the desired impact on the American economy, we must get the money to where it is needed most. How can we make sure this happens?

Read full MarketWatch article.

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Viral Acharya is the C.V. Starr Professor of Economics