Given high inflation, people across the country are being hit by astronomical prices for everyday goods. California has been hit the hardest, leading with gas prices at $6.34, surpassing the already-high national average of $5.
In order to alleviate some of the losses many Californians are facing, Gov. Gavin Newsom plans to offer “inflation relief” payments to over 23 million Californians based on income levels. This plan alone might lead California to the grave.
“The centerpiece of the agreement, a $17 billion inflation relief package, will offer tax refunds to millions of working Californians. Twenty-three million Californians will benefit from direct payments of up to $1,050,” according to a statement made by Newsom, Senate President Pro Tempore Toni Atkins, and Assembly Speaker Anthony Rendon.
Due to the $97 billion budget surplus, Newsom feels that the best way to use these funds is to “get money back into the pockets of Californians.” These stimulus checks will give taxpayers about $300, with additional funds if they have a dependent.
“In the face of growing economic uncertainty, this budget invests in California’s values while further filling the state’s budget reserves,” the statement continued.
In theory, this sounds like a good plan, especially for Californians. Who wouldn’t want free money? In the long run, this plan is like putting a Band-Aid on a gunshot wound. It’s basic economics. The more money people have, the more they spend. As supplies begin to decrease, prices skyrocket. Even Californians agree.
“Putting more money in people’s pockets is going to make the problem worse, because you’ve got more money, people trying to buy more stuff, and the prices are still going to go up. You’ve got to deal with the supply issues,” Millbrae resident Ramiro Cruz told CBS News. “These are all temporary measures. You have to deal with the supply issues. Once you deal with that, the prices will start coming down again.”
There are so many things Newsom could do with the surplus that would actually help fix inflation and benefit the state as a whole. Merely giving Californians money won’t help them in the long run. For one, he could suspend the state’s gas tax or increase tax credits for renters to help with the cost of living.
Just because Californians are suffering from the direct actions of the government does not mean they deserve a “we are sorry” cash flow back into their bank accounts, a stream of cash that is going to make inflation at least a little bit worse. There are better alternatives than simply conditioning Californians into thinking they need to become dependent on checks from the government to live.
Esther Wickham is a summer 2022 Washington Examiner fellow.
