Wednesday, August 10, 2022

"That’s not the way any of this works…"

[Meant to post something about this a month ago but things have been hectic]


Ryssdal was referring to the supremely misguided idea of addressing inflation with stimulus checks.

 From the SF Chronicle. [Emphasis added]

It’s official: Most Californians who filed their taxes in 2020 will get one-time payments totaling about $9.5 billion from the state starting in October to help offset rising inflation.

The Franchise Tax Board has set up a web page with some of the details and a calculator where people can estimate their payment.

The Legislature passed an election-year bill, AB192, authorizing the payments with zero votes against it, and Gov. Gavin Newsom signed it Thursday as part of his budget package.

The bill called these payments Better for Families Refunds, but the tax board is calling them Middle Class Tax Refunds, even though couples making up to $500,000 in 2020 adjusted gross income and individuals making up to $250,000 are eligible.


We shouldn't have to say this but handing out stimulus checks is the worst thing you can do in a period of high inflation. It did, however, make for a nice photo-op.


  1. Well, no. You are assuming that this inflation is a classic economics-theoretic wage-price spiral inflation, and that may not what's happening now. What is more likely to be happening now is a disruption-induced inflation due to supply-chain plus the war in Ukrain. For that sort of thing, a one-time cash payout seems quite sensible.

  2. No, I'm just assuming (as is the Fed) that there's a demand component, even if supply chain issues and the war are major drivers.