6 ms·

California starts sending out stimulus checks up to $1,050

17 points by nodesocket 4y ago

nodesocket 4y ago
Idiotic. Currently elected politicians are literally doing the opposite of the FED and making inflation worse all in the name of trying to stay elected. Burn the economy, peoples savings, and retirements at all costs to stay in office. I hope people enjoy their stimulus checks while their pensions, savings, retirements and jobs go up in smoke.
- joshstrange 4y ago
  How is a (effectively) tax rebate going to cause inflation? Nothing was created out of thin air, they took in more money than they needed in taxes and so they are returning that to the population.
  - deleted 4y ago
    [deleted]
  - anon291 4y ago
    Because they're taking income from the rich and giving it to the poor. Poor people are more likely to spend. If instead they took the money and gave it to rich tax payers (which I imagine would be deeply unpopular), then this would likely reduce inflation as rich people typically would save it, and thus remove it from the consumer spending category.
    - sillystuff 4y ago
      I doubt it will have a measurable, let alone significant effect on inflation. The maximum a single person can receive is $350.
  - ch4s3 4y ago
    In effect it increases the amount of money circulating in the economy, particularly in the parts of the economy where inflation is high e.g. groceries, rents, etc. Basically CA is taking money (via taxes) that would likely sit in some form of savings or equities and transferring it to people who will spend it. As a value neutral take, it simply moves cash into the economy and increases the velocity of money. If the production of goods and services can't keep up, there will be more inflation.
  - ianferrel 4y ago
    Tax rebates cause inflation because they result in more money available to chase an unchanged quantity of goods and services, which causes prices to rise. Similarly, tax increases reduce inflation because after paying taxes, people have less money to buy things that are not taxes. Critically: inflation measures the cost of goods and services, and taxes are not a good or service.
- jollyllama 4y ago
  It's a pretty shrewd move.
  - nodesocket 4y ago
    Only if you on the lower income scale and don’t have any real assets, real estate, savings, stocks, or retirement. Politicians must think their constitutes are financially illiterate. Actually for their base, they probably are.
  - Kon-Peki 4y ago
    I'm not sure if it is "shrewd" or not. But! It is definitely better than all the states that used their Covid windfalls for permanent tax cuts. If we end up with a bad recession, one-time checks are going to hurt an awful lot less than lower recurring tax revenue.
    - jollyllama 4y ago
      The job of the politician isn't to make things better, it's to get re-elected. In this respect their actions are quite shrewd. Making things worse may help them!
    - nodesocket 4y ago
      Tax cuts are better than giving hand outs to people that go out and buy worthless goods and services. At least tax cuts gives money back to people who are actually productive and pay into the system.
      - toomuchtodo 4y ago
        How incredibly out of touch one must be to think that the people getting these checks won’t use from for food, fuel, and rent. The lower classes live in a constant recession, and will put these funds to better use than the marginal dollars of someone very well off: survival.
        anon291 4y ago
carpdiem 4y ago
When I first heard about this, I thought "oh man, how dumb! they're just going to make inflation worse!", and then I read more of the details. By my understanding, the case for stimulus checks leading to inflation comes when the stimulus checks are paid for by printing more money (thus increasing the overall money supply). This program is not that. This program is providing a tax refund from CA's tax surplus. No new money is being created. The only change is who gets to decide how the money is being spent? (e.g., the state? or the people?) If CA could have seen the future, they could have achieved the same end by lowering taxes this last year for people in an equivalent amount. Would anyone seriously argue that lowering taxes is inflationary? How about the contrapositive? Would anyone seriously argue that we should fight inflation by _raising taxes_?
- mfer 4y ago
  Note, CA has the highest state level debt per person of any of the US states.
  - bobthepanda 4y ago
    As a percentage of GDP, it’s not particularly high. https://www.statista.com/statistics/246337/state-debt-in-the-us-as-a-percentage-of-gsp/ https://www.statista.com/statistics/246337/state-debt-in-the... Californians are on paper earning more than many Americans.
    - mfer 4y ago
      If you look at the mean income across states [1] you'll find that there are states where it's higher than California. CA is above average but it's not the top. The money people make in the tech industry isn't representative of what a typical person makes. [1] https://fred.stlouisfed.org/release/tables?eid=259515&rid=249 https://fred.stlouisfed.org/release/tables?eid=259515&rid=24...
  - ramesh31 4y ago
    >Note, CA has the highest state level debt per person of any of the US states. Meaningless. What matters is the ability to service that debt, and the value of the debt compared GDP. Put more simply, would you rather be someone earning $20k/yr with no debt, or someone earning $100k/yr with $20k of debt?.
influx 4y ago
I'm skeptical of elected officials sending money to constituents right before elections.
- danjoredd 4y ago
  Very wise. No matter who it is, everything in politics is about image and voter influence. Im grateful for the help when it is offered to me, but I don't ignore the real purpose behind it all either.
- sidewndr46 4y ago
  I guess I'm just waiting till they point where they tie to either party registration or previous voting records. Buying votes is illegal basically everywhere I think. Paying for prior votes, probably not illegal?
  - tablespoon 4y ago
    > Buying votes is illegal basically everywhere I think. Paying for prior votes, probably not illegal? What's the difference? If you're buying someone's vote, you're almost certainly going to pay after they've voted.
- tablespoon 4y ago
  > I'm skeptical of elected officials sending money to constituents right before elections. There seems to have been a lot of very suspiciously-timed policy announcements like that recently. Of the top of my head: the student loan forgiveness plan, the Federal marijuana possession pardons, and now this.
  - influx 4y ago
    “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.” ― Alexander Fraser Tytler
bayareabadboy 4y ago
Does anyone honestly think this is a good idea on economic grounds? It’s just fighting fire with fire.
- rce 4y ago
  More like fighting fire with gasoline. And emptying the state coffers right before a recession when California tax revenues will be amongst the hardest hit of any state is an additional stupidity. This should all go into the rainy day fund
grnmamba 4y ago
Banana republic
noncoml 4y ago
Isn’t this a form of… (gasp) socialism?
- koheripbal 4y ago
  Given that they are taking a TAX surplus and returning it to the people who paid the LEAST taxes - it's just theft. They aren't even trying to hide behind providing some societal service - they're just seized money from one family, and handing it over to another.
jerlam 4y ago
This is the third stimulus check that California has sent out, after "Golden State Stimulus 1" and "Golden State Stimulus 2". This new one (9.5 billion) is actually less than the previous one (12 bil). Some form of tax rebate is required by law when the state surplus exceeds a certain amount: https://www.kron4.com/news/california/california-budget-surplus-is-big-enough-to-give-every-resident-1100-stimulus-check-state-lawmaker-says/ https://www.kron4.com/news/california/california-budget-surp...
NegativeK 4y ago
These comments are politically rhetorical, nonconstructive, and well below what I'd expect from here.
mercy_dude 4y ago
Given the size of Californias population and and it’s spending power, the grand effect on the entire country would be higher. I wonder if the rest of the states would have to pay the prices (through rising rates).
WirelessGigabit 4y ago
You’d think this will help. But all it’ll do is cause more inflation. This money comes directly to the people. Meaning their creditors don’t get paid. And we all know what happens when people come into money. It’s gets squandered, causes a shortage and causes more inflation. Rents are sky high because the government decided to directly pay people instead of their (I hate the word) landlords.
- hellisothers 4y ago
  All the research points to the exact opposite of what you describe. Google “results of giving money directly” produces many more results, what exactly are you referencing? https://news.mit.edu/2022/givedirectly-cash-charity-0816 https://news.mit.edu/2022/givedirectly-cash-charity-0816

17 points by nodesocket 4y ago

Idiotic. Currently elected politicians are literally doing the opposite of the FED and making inflation worse all in the name of trying to stay elected. Burn the economy, peoples savings, and retirements at all costs to stay in office. I hope people enjoy their stimulus checks while their pensions, savings, retirements and jobs go up in smoke.

joshstrange 4y ago
How is a (effectively) tax rebate going to cause inflation? Nothing was created out of thin air, they took in more money than they needed in taxes and so they are returning that to the population.
- deleted 4y ago
  [deleted]
- anon291 4y ago
  Because they're taking income from the rich and giving it to the poor. Poor people are more likely to spend. If instead they took the money and gave it to rich tax payers (which I imagine would be deeply unpopular), then this would likely reduce inflation as rich people typically would save it, and thus remove it from the consumer spending category.
  - sillystuff 4y ago
    I doubt it will have a measurable, let alone significant effect on inflation. The maximum a single person can receive is $350.
- ch4s3 4y ago
  In effect it increases the amount of money circulating in the economy, particularly in the parts of the economy where inflation is high e.g. groceries, rents, etc. Basically CA is taking money (via taxes) that would likely sit in some form of savings or equities and transferring it to people who will spend it. As a value neutral take, it simply moves cash into the economy and increases the velocity of money. If the production of goods and services can't keep up, there will be more inflation.
- ianferrel 4y ago
  Tax rebates cause inflation because they result in more money available to chase an unchanged quantity of goods and services, which causes prices to rise. Similarly, tax increases reduce inflation because after paying taxes, people have less money to buy things that are not taxes. Critically: inflation measures the cost of goods and services, and taxes are not a good or service.
jollyllama 4y ago
It's a pretty shrewd move.
- nodesocket 4y ago
  Only if you on the lower income scale and don’t have any real assets, real estate, savings, stocks, or retirement. Politicians must think their constitutes are financially illiterate. Actually for their base, they probably are.
- Kon-Peki 4y ago
  I'm not sure if it is "shrewd" or not. But! It is definitely better than all the states that used their Covid windfalls for permanent tax cuts. If we end up with a bad recession, one-time checks are going to hurt an awful lot less than lower recurring tax revenue.
  - jollyllama 4y ago
    The job of the politician isn't to make things better, it's to get re-elected. In this respect their actions are quite shrewd. Making things worse may help them!
  - nodesocket 4y ago
    Tax cuts are better than giving hand outs to people that go out and buy worthless goods and services. At least tax cuts gives money back to people who are actually productive and pay into the system.
    - toomuchtodo 4y ago
      How incredibly out of touch one must be to think that the people getting these checks won’t use from for food, fuel, and rent. The lower classes live in a constant recession, and will put these funds to better use than the marginal dollars of someone very well off: survival.
      - anon291 4y ago

carpdiem 4y ago

When I first heard about this, I thought "oh man, how dumb! they're just going to make inflation worse!", and then I read more of the details. By my understanding, the case for stimulus checks leading to inflation comes when the stimulus checks are paid for by printing more money (thus increasing the overall money supply). This program is not that. This program is providing a tax refund from CA's tax surplus. No new money is being created. The only change is who gets to decide how the money is being spent? (e.g., the state? or the people?) If CA could have seen the future, they could have achieved the same end by lowering taxes this last year for people in an equivalent amount. Would anyone seriously argue that lowering taxes is inflationary? How about the contrapositive? Would anyone seriously argue that we should fight inflation by _raising taxes_?

mfer 4y ago
Note, CA has the highest state level debt per person of any of the US states.
- bobthepanda 4y ago
  As a percentage of GDP, it’s not particularly high. https://www.statista.com/statistics/246337/state-debt-in-the-us-as-a-percentage-of-gsp/ https://www.statista.com/statistics/246337/state-debt-in-the... Californians are on paper earning more than many Americans.
  - mfer 4y ago
    If you look at the mean income across states [1] you'll find that there are states where it's higher than California. CA is above average but it's not the top. The money people make in the tech industry isn't representative of what a typical person makes. [1] https://fred.stlouisfed.org/release/tables?eid=259515&rid=249 https://fred.stlouisfed.org/release/tables?eid=259515&rid=24...
- ramesh31 4y ago
  >Note, CA has the highest state level debt per person of any of the US states. Meaningless. What matters is the ability to service that debt, and the value of the debt compared GDP. Put more simply, would you rather be someone earning $20k/yr with no debt, or someone earning $100k/yr with $20k of debt?.

influx 4y ago

I'm skeptical of elected officials sending money to constituents right before elections.

danjoredd 4y ago
Very wise. No matter who it is, everything in politics is about image and voter influence. Im grateful for the help when it is offered to me, but I don't ignore the real purpose behind it all either.
sidewndr46 4y ago
I guess I'm just waiting till they point where they tie to either party registration or previous voting records. Buying votes is illegal basically everywhere I think. Paying for prior votes, probably not illegal?
- tablespoon 4y ago
  > Buying votes is illegal basically everywhere I think. Paying for prior votes, probably not illegal? What's the difference? If you're buying someone's vote, you're almost certainly going to pay after they've voted.
tablespoon 4y ago
> I'm skeptical of elected officials sending money to constituents right before elections. There seems to have been a lot of very suspiciously-timed policy announcements like that recently. Of the top of my head: the student loan forgiveness plan, the Federal marijuana possession pardons, and now this.
- influx 4y ago
  “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.” ― Alexander Fraser Tytler

bayareabadboy 4y ago

Does anyone honestly think this is a good idea on economic grounds? It’s just fighting fire with fire.

rce 4y ago
More like fighting fire with gasoline. And emptying the state coffers right before a recession when California tax revenues will be amongst the hardest hit of any state is an additional stupidity. This should all go into the rainy day fund

grnmamba 4y ago

Banana republic

noncoml 4y ago

Isn’t this a form of… (gasp) socialism?

koheripbal 4y ago
Given that they are taking a TAX surplus and returning it to the people who paid the LEAST taxes - it's just theft. They aren't even trying to hide behind providing some societal service - they're just seized money from one family, and handing it over to another.

jerlam 4y ago

This is the third stimulus check that California has sent out, after "Golden State Stimulus 1" and "Golden State Stimulus 2". This new one (9.5 billion) is actually less than the previous one (12 bil). Some form of tax rebate is required by law when the state surplus exceeds a certain amount: https://www.kron4.com/news/california/california-budget-surplus-is-big-enough-to-give-every-resident-1100-stimulus-check-state-lawmaker-says/ https://www.kron4.com/news/california/california-budget-surp...

NegativeK 4y ago

These comments are politically rhetorical, nonconstructive, and well below what I'd expect from here.

mercy_dude 4y ago

Given the size of Californias population and and it’s spending power, the grand effect on the entire country would be higher. I wonder if the rest of the states would have to pay the prices (through rising rates).

WirelessGigabit 4y ago

You’d think this will help. But all it’ll do is cause more inflation. This money comes directly to the people. Meaning their creditors don’t get paid. And we all know what happens when people come into money. It’s gets squandered, causes a shortage and causes more inflation. Rents are sky high because the government decided to directly pay people instead of their (I hate the word) landlords.

hellisothers 4y ago
All the research points to the exact opposite of what you describe. Google “results of giving money directly” produces many more results, what exactly are you referencing? https://news.mit.edu/2022/givedirectly-cash-charity-0816 https://news.mit.edu/2022/givedirectly-cash-charity-0816