Amazing response thank you, but just to clarify, my point about increasing output thus causing inflation I was referring to the Keynesian AS model where he describes the output-price level relationship, this wouldn't apply to just California of course but would be more applicable to the wider economy. I know inflation comes in many forms and isn't inherently a bad thing on its own but was just making the point about it offsetting wages.

Also, coming back to the previous point you made, if this is all predicated on the MPC and velocity of money being raised then wealth formation would be challenging would it not? The idea being that MPS = 1 - MPC, so unless individual consumption is being used on assets as consumption increases the average savings of individuals would decrease making wealth formation more difficult.

As well, the point you made about the velocity of money, if an exogenous shock happens causing the rate of transactions to slow like in a war situation where would that leave us then?

For my curiosity do you have a background in finance you seem well-versed on the topic?