Negotiations on President Joe Biden’s $1.9 trillion economic stimulus proposal are underway, with Republicans proposing a much smaller package and Democrats pursuing other relief such as the repeal of a state tax deduction cap. An analysis looks at the effectiveness of the Paycheck Protection Program in assisting businesses. The day traders that have upended Wall Street are making a move on SPACs, and competition for wind turbines is heating up. In Connecticut, demand is increasing for PPP loans, startups report a strong year of financing, and state lawmaker are mulling additional support for nonprofits.
National
The Biden administration is emphasizing the need for a robust aid package to help the United States to recover from the economic downtown accompanying the COVID-19 pandemic. Ten Republican senators have issued a proposal for “targeted” aid amounting to about $600 billion, and some Democratic state lawmakers are asking that the package include a repeal of a $10,000 cap on state and local tax deductions.
Business trends
The New York Times recently published a feature on economic analyses of the effectiveness of the Paycheck Protection Program. Some economists are arguing that the program was relatively ineffective at saving jobs, and their findings could shape how the Biden administration provides further assistance to businesses.
Day traders, who have fueled much-publicized stock boosts for companies like GameStop recently, are also becoming more involved in special-purpose acquisition companies. The Wall Street Journal reports how smaller investors are playing a role in the growth of SPACs, which work to take private firms public.
With offshore wind developments gaining steam, there is also increased competition in the wind turbine market. Several companies have sought to gain a foothold in the emerging market, with some firms already charging competitors with patent infringement.
Connecticut
Nearly 4,800 Connecticut businesses applied for approximately $480 million under the Paycheck Protection Program in its first week after the program was revived. This demand is considerably lower than what the state saw when PPP was first launched.
Connecticut startups have were successful in securing funds last year despite the economic turmoil of the COVID-19 pandemic. Firms in their growth stage reported close to $500 billion in funding in 2020, a year-over-year gain of 7 percent.
State lawmakers are considering a five-year plan to boost funding to nonprofit social service agencies, which have seen higher demand during the pandemic. The Connecticut Community Nonprofit Alliance has reported that state funding has not kept pace with inflation to the tune of about $461 million, and the state plan would help close this gap.
