4 ms·

California doesn't print money, the Federal Reserve does. California is required to balance its budget by law, like every state but Vermont. Nearly every stat

California doesn't print money, the Federal Reserve does. California is required to balance its budget by law, like every state but Vermont. Nearly every state has more money than normal right now (some of it from high tax revenues due to nearly full employment, some due to federal stimulus), so they're finding ways of getting rid of the money. This is a second order effect from the much too large stimulus in 2020/2021.

Negitivefrags 4y ago
You would think that there would be something more useful to do with the money, like fixing the infrastructure.
- pkaye 4y ago
  Any excess taxes above some budget threshold has to be refunded to the public due to some proposition.
- abstrctComp 4y ago
  Why is stabilizing human beings economic anxiety not useful? What theory of science dictates infrastructure is the best place to spend it? If the answer is none, it’s a purely social policy and you’re spewing politically correct memory. That infra spend is not an immutable law of reality means there are options other than “poison the sky with expansive vanity projects.” Even then, there’s plenty of money for both, and human agency available for both. We can stop pretending money is what drives human invention and discovery. It’s politically correct spoken tradition since it’s not an immutable law; how we feel about other economic choices is a range of possibilities, not just the ones we have been raised to speak of
- xorfish 4y ago
  Fixing infrastructure is not always useful. Infrastructure for low density suburbs is a money pit that bankrupts cities. Here is a good playlist that explains why this is the case: https://www.youtube.com/watch?v=y_SXXTBypIg&list=PLJp5q-R0lZ0_FCUbeVWK6OGLN69ehUTVa https://www.youtube.com/watch?v=y_SXXTBypIg&list=PLJp5q-R0lZ...
  - californical 4y ago
    Thank you for posting this! Suburban infrastructure essentially steals from the economically productive areas and gives to the wealthy and unproductive regions
- 0xy 4y ago
  California's high-speed rail money pit hasn't had enough cash thrown in? The state is incapable of building nearly anything.
  - m0llusk 4y ago
    CA HSR is moving ahead. Major infrastructure projects are more difficult and expensive in the US because we have far stronger property rights than China or European nations.
    - rsync 4y ago
      "CA HSR is moving ahead ..." ... minus the "HS" part. Last I checked it was on the politically brokered "non-I-5" corridor (a silly, absurd route) and had a proposed SF->LA trip time of over 2.5 hours. This is a "high speed" train, circa 1975. Current technology, as demonstrated by running trains elsewhere in the world, would make that route in under 2 hours.
bushbaba 4y ago
The excess tax revenues was also caused by overly inflated IPOs and more than normal capital gains. At least in CA, if the surplus is large enough the government is legally required to give the money back if not spent. Gavin Newsom in this case is acting like Robinhood. Taking from the rich and giving to the less well off.
- 0xy 4y ago
  He's taking from the children of the recipients, considering California's current debt load. When you're underwater, a "profit" doesn't mean you're suddenly flush with cash. It's still debt-funded frivolity, which will paid by children.
  - KptMarchewa 4y ago
    Current debt is being quickly inflated away. Also, $143 billion debt is peanuts for 3 trillion dollars economy like California. So, your "children" comments are pure demagogy.
    - 0xy 4y ago
      That's over half the usual budget for California, so no it's not "peanuts". The ability to service debt is a function of the government's resources, not the entire economy. As pointed out, the year was anomalous for California, who usually runs a deficit of over $50,000,000,000. Seems like this is a case of a compulsive indebted gambler patting himself on the back for a good streak at the tables. California's surplus came from temporarily increased CGT receipts. That trend will be reversed this year considering the markets, and they'll be back to bleeding 10 figures.
  - giantrobot 4y ago
    Government debt is not like personal debt. Governments debt is structured and has fixed predictable rates (bonds etc). There's no incentive to pay down debt because the debt holders want long term structured repayment. The only time government debt is bad is when the government can't make the payments.
anon291 4y ago
A charitable interpretation of the comment above would assume that the taxes being collected are primarily the result of printed money, or at least that the fed's printed money forms a large portion of these revenues which are again being redistributed. It's actually quite sneaky. Print money to stimulate the economy and then tax it back out to redistribute. You just printed the poor into 'wealth', but did it in an incredibly roundabout way that saves all the politicians face.
nostromo 4y ago
The only reason the states are afloat right now is because the federal government gave them hundreds of billions in printed money. So, yeah, it’s printed all the same. 1. Federal reserve makes several trillions in new money and lends it to the US Government. 2. The US Government passes “infrastructure” and “Covid relief” bills that shower billions on states and cities. If not for this flow of printed money, most of the states would be cutting budgets since 2020. So, yeah, a lot of it is printed.
- imtringued 4y ago
  You know, if there is a world where money isn't printed but people refer to it as printing, then maybe at some point the government will do exactly that because people don't seem to be concerned about the rate at which money is being spent nor do they care if the government does it or not, they just want to complain.

Negitivefrags 4y ago

You would think that there would be something more useful to do with the money, like fixing the infrastructure.

pkaye 4y ago
Any excess taxes above some budget threshold has to be refunded to the public due to some proposition.
abstrctComp 4y ago
Why is stabilizing human beings economic anxiety not useful? What theory of science dictates infrastructure is the best place to spend it? If the answer is none, it’s a purely social policy and you’re spewing politically correct memory. That infra spend is not an immutable law of reality means there are options other than “poison the sky with expansive vanity projects.” Even then, there’s plenty of money for both, and human agency available for both. We can stop pretending money is what drives human invention and discovery. It’s politically correct spoken tradition since it’s not an immutable law; how we feel about other economic choices is a range of possibilities, not just the ones we have been raised to speak of
xorfish 4y ago
Fixing infrastructure is not always useful. Infrastructure for low density suburbs is a money pit that bankrupts cities. Here is a good playlist that explains why this is the case: https://www.youtube.com/watch?v=y_SXXTBypIg&list=PLJp5q-R0lZ0_FCUbeVWK6OGLN69ehUTVa https://www.youtube.com/watch?v=y_SXXTBypIg&list=PLJp5q-R0lZ...
- californical 4y ago
  Thank you for posting this! Suburban infrastructure essentially steals from the economically productive areas and gives to the wealthy and unproductive regions
0xy 4y ago
California's high-speed rail money pit hasn't had enough cash thrown in? The state is incapable of building nearly anything.
- m0llusk 4y ago
  CA HSR is moving ahead. Major infrastructure projects are more difficult and expensive in the US because we have far stronger property rights than China or European nations.
  - rsync 4y ago
    "CA HSR is moving ahead ..." ... minus the "HS" part. Last I checked it was on the politically brokered "non-I-5" corridor (a silly, absurd route) and had a proposed SF->LA trip time of over 2.5 hours. This is a "high speed" train, circa 1975. Current technology, as demonstrated by running trains elsewhere in the world, would make that route in under 2 hours.

bushbaba 4y ago

The excess tax revenues was also caused by overly inflated IPOs and more than normal capital gains. At least in CA, if the surplus is large enough the government is legally required to give the money back if not spent. Gavin Newsom in this case is acting like Robinhood. Taking from the rich and giving to the less well off.

0xy 4y ago
He's taking from the children of the recipients, considering California's current debt load. When you're underwater, a "profit" doesn't mean you're suddenly flush with cash. It's still debt-funded frivolity, which will paid by children.
- KptMarchewa 4y ago
  Current debt is being quickly inflated away. Also, $143 billion debt is peanuts for 3 trillion dollars economy like California. So, your "children" comments are pure demagogy.
  - 0xy 4y ago
    That's over half the usual budget for California, so no it's not "peanuts". The ability to service debt is a function of the government's resources, not the entire economy. As pointed out, the year was anomalous for California, who usually runs a deficit of over $50,000,000,000. Seems like this is a case of a compulsive indebted gambler patting himself on the back for a good streak at the tables. California's surplus came from temporarily increased CGT receipts. That trend will be reversed this year considering the markets, and they'll be back to bleeding 10 figures.
- giantrobot 4y ago
  Government debt is not like personal debt. Governments debt is structured and has fixed predictable rates (bonds etc). There's no incentive to pay down debt because the debt holders want long term structured repayment. The only time government debt is bad is when the government can't make the payments.

anon291 4y ago

A charitable interpretation of the comment above would assume that the taxes being collected are primarily the result of printed money, or at least that the fed's printed money forms a large portion of these revenues which are again being redistributed. It's actually quite sneaky. Print money to stimulate the economy and then tax it back out to redistribute. You just printed the poor into 'wealth', but did it in an incredibly roundabout way that saves all the politicians face.

nostromo 4y ago

The only reason the states are afloat right now is because the federal government gave them hundreds of billions in printed money. So, yeah, it’s printed all the same. 1. Federal reserve makes several trillions in new money and lends it to the US Government. 2. The US Government passes “infrastructure” and “Covid relief” bills that shower billions on states and cities. If not for this flow of printed money, most of the states would be cutting budgets since 2020. So, yeah, a lot of it is printed.

imtringued 4y ago
You know, if there is a world where money isn't printed but people refer to it as printing, then maybe at some point the government will do exactly that because people don't seem to be concerned about the rate at which money is being spent nor do they care if the government does it or not, they just want to complain.