California To Send Out Inflation Relief Check, Increasing Inflation

This is meant to fight high gas prices. What happens when you “prime the pump” with even more stimulus during times of inflation? You get more inflation. Which doesn’t matter to the Democrats in Sacramento, they see a way to buy the support of Californians come election time, because most of the electeds are rich and the inflation doesn’t bother them

Millions of Californians to receive ‘inflation relief’ with gas tax rebate checks

Millions of California taxpayers may get thousands of dollars to help combat the high cost of gas and other goods.

The money will be distributed soon as California Gov. Gavin Newsom and legislative leaders reached an agreement over the framework for the 2022-23 state budget, Newsom’s office announced Sunday.

About 23 million eligible Californians could each receive payments of up to $1,050 as part of a $17 billion inflation relief package, the governor’s office said in a news release.

“California’s budget addresses the state’s most pressing needs, and prioritizes getting dollars back into the pockets of millions of Californians who are grappling with global inflation and rising prices of everything from gas to groceries,” Newsom, Senate President pro Tempore Toni G. Atkins, and Assembly Speaker Anthony Rendon said in the release.

The deal comes as California drivers face the highest gas prices in the nation as the average price for a gallon of gas in the state Monday is $6.32, according to AAA, nearly 30% higher than the national average. Newsom first proposed a gas tax refund in March.

California has a budget surplus of $97 billion. They could use it to build a couple of gas refineries, which would bring gas prices down. Obviously not immediately, but, even signalling there would be construction would signal to the market to bring it down. But, the money is not just going to vehicle owners, but, everyone who fits the demographic. Which means demand for goods and services rise, chasing limited goods and services, which increases the prices.

(Sacramento Bee) The “inflation relief” package championed by Gov. Gavin Newsom and Democratic legislative leaders could have the opposite effect, pushing inflation — now at its higher level in 40 years — even higher, top economists say.

“One-off tax holidays or rebates which put more money in people’s pockets without doing anything to boost supply are inflationary,” said Jared Walczak, vice president of state projects at the Tax Foundation, a Washington-based research group.

The Bee contacted economists familiar with California. All but one saw the plan as having the possibility of adding to inflation.

“Any increases in government spending will generally increase inflationary pressures,” said Michael Shires, associate professor of public policy at Pepperdine University.

During normal times, send refund checks back to taxpayers from the surplus would be a good idea. It’s not normal. But, Californians vote for these types of leftist crazies who do not understand Real World Economics, so, enjoy!

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One Response to “California To Send Out Inflation Relief Check, Increasing Inflation”

  1. Professor Hale says:

    I disagree that this could worsen inflation.

    Since California does not control the money supply but only redistributes it within the state (and throughout Mexico and Central America) this does not create inflationary imbalance. The Federal government giving away money actually creates money when they don’t have enough.

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