Like a dog chasing its tail, some states are moving in the wrong direction by writing stimulus checks in what will be a fruitless attempt to combat inflation.  There is no evidence that artificially pumping money into the economy will halt inflation.  In fact, numerous economists have determined that the $1.9 trillion American Rescue Plan Act, which included a third round of stimulus checks in response to the pandemic, was a significant factor in fueling the highest inflation in 40 years.  And some prices are already coming down, so pumping more money into state economies will push prices back up.

California, with a Democratic legislature and governor and a $98 billion surplus, approved $17 billion for inflation relief, better known as government cash.  The Golden State residents will be receiving checks of $350 for individuals and up to $1,050 for families to help offset higher prices from inflation, which is circular logic at best.  Massachusetts, with a Democratic controlled legislature and a Republican governor, is debating whether to provide $250 for individuals and $500 for married taxpayers filing joint returns.  The legislature has until the end of the session on July 31 to pass the House and Senate and get the bill signed by the governor to take effect.

A statement from Massachusetts House of Representatives Speaker Ron Mariano, Senate President Karen Spilka, House Ways & Means chair Aaron Michlewitz and Senate Ways and Means Chair Michael Rodrigues noted, “Whether it is the rising price of gas, groceries or summer clothes for kids, the Massachusetts Legislature has heard loud and clear that increased costs due to inflation have cut into family budgets.”  There has been no word from Gov. Charlie Baker (R) if he agrees that sending checks to some taxpayers, which would be funded by every taxpayer in the state, would be effective in fighting inflation.  

A one-time payment for “inflation relief” is far different than tax rebates that many states are providing to all taxpayers based on income.  They are feel-good band-aids that will make everything more expensive and keep inflation going longer than it would otherwise.  

Politicians should stop appropriating funds for stimulus payments if they want to combat inflation.