Californian Governor Gavin Newsom announced a new inflationary package that would inject another $18.1 billion dollars into the economy. On what I am sure is an unrelated note, Governor Newsom is up for reelection this year after narrowly escaping a recall last year.
To be fair Newsom actually called the package a $18.1 Billion "Relief" Package, but we all know that nothing fuels inflation quite like more government money being thrown at the economy. That's why we're where we're at in the first place.
In a press release, Newsom said:
The package includes direct payments to help address costs of rising inflation and past-due water and utility bills, free public transit, money for health care workers, middle-class health care subsidies, and waiving child care fees for families
Yes, that's right: More direct payments!
Specifically the package would include:
- $400 checks to every eligible registered vehicle owner, capped at two checks per individual
- State funds for qualified low-income tenants who requested rental assistance before March 31
- $1.2 billion for electricity bills and $200 million for water bills
- Providing up to $1,500 to hospital and skilled nursing facility workers
- Three months of free public transportation for communities throughout the state
- Extending health insurance premium assistance under Covered California for families of four earning up to $166,500 annually
- A 12-month pause in the sales tax rate for diesel fuel
- Waiving child care fees for low-income families
On top of that, the press release says that California's minimum wage is projected to increase to $15.50 per hour for all workers on January 1, 2023.
Basic economics would suggest that Newsom's plan should make inflation even worse. I'm sure Jerome Powell over at the Federal Reserve who is trying to get inflation in check is looking at Governor Newsom like this:
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