3 ms·
They may not be printing money, but they are propping up inflation by giving people free money for compensating for inflation.
by petilon 4y ago
They may not be printing money, but they are propping up inflation by giving people free money for compensating for inflation.
- anon291 4y agoRight. One way to combat inflation is to save money. The fed encourages this by increasing the interest rate. If california truly wanted to reduce inflation, it would simply retain those $1000 checks. Taking money out of supply reduces inflation.
- groby_b 4y agoCalifornia doesn't want to reduce inflation. (It would be of at least questionable legality, too. Because monetary policy lies with the federal government - Article 1, Section 8) What California does want to do is ensure poorer people aren't bearing the load disproportionately. Also, while we can certainly argue if this is the best use of those funds, a quick reminder that the size of the US money supply is almost 22 trillion. We're about $6T above 2019 levels. California retaining $10B is not going to have any measurable impact on inflation.
- bigyikes 4y agoYes, people are ignoring the second-order effects. Just because California can’t directly print money doesn’t mean they aren’t contributing to the macroeconomic factors leading to the Fed feeling the need to print more money.
- imtringued 4y agoThey can spend the money on things that don't inflate. A tax rebate can only be spent on energy which makes the problem worse.