Economic experts pan Hochul’s ‘inflationary’ ‘inflation refunds’: ‘Not difficult math’

Several economic experts have recently criticized New York Gov. Kathy Hochul’s plan to distribute “inflation refunds” to qualifying New Yorkers as part of her 2025 State of the State initiative. Under the proposal, $3 billion in direct payments would be made to about half of the state’s 19 million residents, with single taxpayers making up to $150,000 per year receiving $300 and joint filers making twice that amount receiving $500.

Hochul defended the initiative, stating that the state had generated unprecedented revenues through sales tax and was now returning that cash to middle-class families. However, critics like Andy Puzder, a former CEO of CKE Restaurants, argued that the move was simply a ploy to win votes. Puzder suggested that instead of redistributing money, the state should consider reducing sales tax to benefit all residents.

Puzder, who is now a lecturer on economics and a senior public policy fellow at Pepperdine University, pointed out that similar handouts in the past had led to inflation. He criticized President Biden’s American Rescue Plan, which he believed had contributed to nationwide inflation. Puzder also highlighted the population decline in New York and suggested that reducing taxes could prevent residents from leaving the state.

Former Rep. Dave Brat, an economist and vice provost at Liberty University, echoed Puzder’s sentiments, citing Milton Friedman’s view that inflation is a monetary phenomenon. Brat emphasized that the solution to inflation lies with the Federal Reserve in Manhattan, not in Albany. He also criticized the $500 refunds as a symbolic gesture against a significant hidden tax, given the high real inflation rate in recent years.

EJ Antoni, another economist, expressed concerns about the refunds being inflationary and increasing the cost of living for New Yorkers. He warned that additional government spending could lead to higher taxes in the future and create a feedback loop of handouts. Antoni suggested that reducing taxes would be a more effective way to help residents than providing government payments.

Overall, the experts agreed that Hochul’s proposal could have unintended consequences and urged caution in implementing such initiatives. They emphasized the importance of addressing inflation at the federal level and reducing government spending to prevent further economic challenges. While Hochul’s office did not respond to requests for comment, the diverse viewpoints presented highlight the complexities of economic policies and their impact on individuals and the state as a whole.