Steve Randall Howe of Denver fraudulently obtained more than a million dollars in Paycheck Protection Program loans for companies with no employees and no business operations. He spent it on a house, luxury goods, travel, club memberships, and wire transfers to China, and a federal judge sentenced him to 30 months in federal prison earlier this month. Last month, the Justice Department, the Small Business Administration, and the SBA inspector general announced Operation No Doze, a nationwide enforcement surge against pandemic-loan fraud. With 44 U.S. Attorney’s Offices and 20 investigative agencies involved, it brought in more than 160 defendants and hundreds of millions in intended losses to taxpayers.
Attorney General Todd Blanche put it plainly: “Pandemic loan relief was meant to keep American small businesses alive during government lockdowns, not line the pockets of fraudsters.” That sentence ought to settle a debate that has dragged on for 6 years. The Democrats and their willing accomplices in the drive-by media have spent those years calling PPP an $800 billion giveaway to wealthy owners and connected insiders, and more than a few conservatives have come to believe them. They have it backward. PPP was a temporary bridge for businesses the government, at Dr. Fauci’s insistence, closed, restricted, or starved of customers, and it worked by holding employer and worker together, along with the productive machinery around them, until commerce could resume. Conservatives should defend it, and they should hunt down every thief who robbed it.
Picture a restaurant owner who spent 15 years building a place that employs 25 people. Before March 2020, it brought in $200,000 a month, paid $170,000 in expenses, and cleared $30,000 in operating profit. Then the state closed the dining room. Customers vanished, and revenue collapsed, while payroll, rent, insurance, utilities, and the vendor invoices kept arriving on schedule. The owner could burn through savings paying people for work the government would not permit, or lay off all 25 and hope to rebuild someday. A business that fails in open competition deserves no rescue. This one failed for no reason other than the state ordering it to stand idle. When government forbids a lawful enterprise from earning a living, the loss isn’t the entrepreneur’s fault, and justice runs toward restitution. Conservatives who defend property rights should be the first to see it. Money advanced on those terms is bridge financing for an interruption the government itself imposed, and it has little in common with the corporate welfare we rightly despise.
The scale of the emergency Dr. Fauci outlined explains why Congress moved so fast. In April 2020, nonfarm payrolls fell by 20.5 million, and unemployment hit 14.7%. The worst of it landed on the smallest employers. The Bureau of Labor Statistics found that among employers with 1 to 9 workers, closures accounted for the largest share of pandemic job loss, and those firms carry the thinnest reserves and the least ability to survive a mandated pause.
The CARES Act, which President Trump signed with bipartisan support on March 27, 2020, never asked about revenue, profit, enterprise value, or the owner’s net worth. It asked about payroll. Loans were calculated from historical payroll, typically 2.5 times the average monthly figure and subject to statutory caps, and the money could cover payroll, health benefits, rent, utilities, and related operating costs. By June 2020, full forgiveness required at least 60% to go to payroll, with the balance limited to qualified expenses. Senator Marco Rubio, who wrote the program, wanted workers to have “the security of a job to return to,” and the formula was built to deliver exactly that.
Suppose our restaurant received a $150,000 forgivable loan. Over 3 normal months, it would have rung up $600,000 in sales and cleared $90,000 in operating profit, and the loan replaced neither. It paid the cooks and servers, covered the rent, and kept the lights on through the shutdown. Given the choice, and by a wide margin, the owner would have served customers and earned a normal return without a dollar from Washington.
The $150,000 actually bought the restaurant itself. A going concern is a line cook who knows the menu cold, a lease, kitchen equipment, permits, supplier accounts, a schedule people have built their lives around, the goodwill of regulars and the local knowledge of 15 years in business, all of it perishable if payroll and core expenses cannot be carried through a temporary shutdown. Once the doors close for good, the cook files for unemployment, the landlord goes looking for a tenant, the produce vendor loses an account, and the neighborhood waits for someone to assemble a replacement from scratch. Keeping an engine idling while the road is closed costs money; scrapping the truck and hiring a new driver later costs far more.
The Congressional Budget Office estimated that PPP saved roughly 106 million job-weeks in 2020 and concluded that it would speed recovery by limiting closures and preserving the match between employers and workers. Federal Reserve researchers later looked at what happened when the money stopped. The first appropriation ran dry in April 2020, and the 10-day lending gap that followed raised May job losses and reduced recalls all summer. About half the jobs lost to it were at firms with fewer than 10 employees, though such firms account for less than 20% of employment. A windfall does not leave that footprint; employers living month to month do.
Olga Gorbachev, Maria Luengo-Prado and their coauthor, writing in the Journal of Public Economics in 2026, estimated that PPP preserved about 5.85 million job-years across the urban counties they examined during 2020 and 2021, at an implied gross cost of about $89,000 per job-year. Fully 47% of those job-years fell in 2021. In the matched-firm analysis, recipients recovered customer traffic faster than comparable nonrecipients, and the gap widened through February 2022. A program that funded only 8 weeks of payroll would not show that pattern; a program that kept firms alive long enough to join the recovery would.
Early access to PPP was flawed. Existing bank relationships mattered more than they should have, and the Government Accountability Office found that the first round skewed toward the larger end of small business. Yet Congress authorized about $814 billion in commitment authority across 3 phases, required a certification of necessity, and covered ordinary employers and the self-employed alike. David Autor and his MIT colleagues estimate that 94% of employers with fewer than 500 workers took a loan. One of my own companies received a PPP loan, and it saved it from bankruptcy. The PPP loan let it keep everyone on the payroll, but the shutdown erased millions in revenue and enterprise value. When I hear people angry at companies that took PPP loans, I realize they think business owners got the money, but most of us got none of it; we just got to stay in business and try to rebuild after the pandemic. We all would have preferred that the government lets us simply stay open.
David Splinter and colleagues tracked 2020 first-draw loans through tax records in a 2026 study and estimated the gross cost at roughly $133,000 per retained job-year. Higher income and payroll tax receipts, together with lower unemployment compensation, cut that by about 24%, to $101,000, so even the gross figures overstate what taxpayers paid. Either number, $89,000 gross or $101,000 net, exceeds what most preserved jobs paid, and critics conclude from that arithmetic that the money would have been better spent on direct unemployment benefits, or not spent at all. The Heritage Foundation made the case against the first option in 2020: keeping workers attached to their employers beats paying them to stay home, and the data since have vindicated it.
That arithmetic prices a single output, a paycheck in a single month. It leaves out the leases kept, the supplier accounts kept, the trained teams kept, and the local services kept, along with a recovery that began with existing firms instead of waiting on new ones. The honest comparison was never $814 billion against zero. It was $814 billion against more unemployment compensation, lower tax receipts, more permanent closures and the long, expensive work of rebuilding viable enterprises after the fact. No study has produced a complete accounting of that counterfactual, so nobody can claim a precise all-in savings figure, and nobody can pretend the alternative was free.
Fraud is the harder stain. GAO draws the line carefully: every fraudulent payment is improper, but not every improper payment is fraud, and neither category describes an employer who followed the statute. Howe fabricated payroll records and tax filings for shell companies and then bought a house; the restaurant owner down the street documented real wages for real cooks, spent the proceeds on authorized purposes, and satisfied the forgiveness rules Congress wrote. SBA accepted far too little verification in the rush to move money in April 2020, and Congress knew it at the time. The theives who exploited that gap belong in prison, which is exactly where Operation No Doze is sending them.
In 2022, Congress wisely extended the statute of limitations on PPP fraud to 10 years, and it should keep the SBA inspector general and the DOJ fraud division funded through the last day of that window. It should insist on clawbacks alongside convictions, so recovered dollars actually return to Treasury. That work keeps the thief and the employer apart, and the left has every reason to blur them into a single figure, because a Main Street that remembers PPP as theft will accept more federal supervision the next time, while a public that remembers it as rescue will ask harder questions about lockdowns. The workers who kept their paychecks, the owners who kept their doors, and the towns that kept their employers belong in the ledger alongside the waste and fraud, and the men now standing before federal judges in 40 districts prove such a ledger can be kept honestly.
For the next emergency, and there will be one, lawmakers should require that any payroll-based relief be checked against the quarterly Form 941 filings employers already submit to the IRS before a dollar moves; that step alone would have stopped Howe at the door. At the end of the day, a government that interrupts lawful business owes the people it interrupts a seperate accounting from the one it owes the criminals who robbed it. The first entry belongs to governors and mayors, because the $814 billion was the price of their orders, and anyone who reaches for shutdown powers next time should be required to score the cost of closing commerce before signing the order.
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Alexander Muse is a Fellow at the John Milton Freedom Foundation and publishes political analysis at amuseonx.com. Readers who identify errors are invited to contact me directly. Each op-ed is edited for grammar and clarity using AI in partnership with Grammarly. Data provided in a sponsored partnership with Polymarket.
Why isn't Fauci in jail for ruining so many lives?
Sorry* to make a petty comment for an otherwise outstanding and very informative essay, but Mr. Muse, you've got two spelling errors: "theives" and "seperate." In your haste to press "Publish," you must have forgotten to run "spellcheck"?
* former high school English teacher here: I cannot force my eyes to ignore typos!