[abeppu]

But in the Californian case, it's not printing money. The state government doesn't have the ability to make US dollars. The state must balance its budget, and cannot rely on debt the way the federal government does. The inflation checks are only possible because of a giant, historic budget surplus from 2021. Had inflation not gotten this bad, the checks would have still gone out in some other form (earlier in 2022 we were talking about it as a "tax rebate").

Though this action is redistributive, it is explicitly not about printing money. It is about spending excess tax dollars. You may have opinions about taxes in the state, and you may have opinions about redistribution, but overall if the state temporarily has a surplus (ie it shouldn't put this money towards increasing long running programs that will become a burden in future years), shouldn't it give that money back to the citizens in some form?

[imtringued]

Complaining about printing money is like complaining about the internal combustion engine in an electric vehicle. This is especially annoying when what people are really asking for is a speed limit. But since everyone keeps talking about the wrong thing nothing will get done just like how an ICE mechanic isn't going to fix your EV.

[KptMarchewa]

>how an ICE mechanic isn't going to fix your EV

Unless the problem is with your wheels.

[ALittleLight]

I never said that it was inflationary in the California case. I don't think it is. As to whether or not the state should send checks to everyone - I don't really know anything about it and so don't have a firm opinion. My intuition is that individuals will likely spend the money better than the state would have, so that's good, and it's probably an indication that taxes are too high if the state has a big surplus.

[abeppu]

California doesn't distinguish between capital gains and other income, and both are taxed on a progressive bracket system. In years where lots of rich people realize gains, the state has more income. Plus wage growth.

But Keynes advocated that governments should have surpluses in good times and spend more in bad ones. Normally because the state isn't able to carry a continuing large surplus, this isn't possible; it has to cut in lean years and give rebates otherwise. It's only in this short period of reversal in consecutive years that we can approach that policy. I'm guessing the same checks would have done more good if they could have waited until 2023 or later.