Black Americans whose ancestors were enslaved have been excluded from full citizenship in the United States for the last 247 years — and granting them full citizenship will cost between $13 trillion and $14 trillion, economist William “Sandy” Darity told a conference of fellow U.S. economists last week.
To see the impact of second-class citizenship on Black Americans, look no further than the racial wealth gap, Darity, a professor of public policy at Duke University, said during a panel on inequality at the American Economic Association meetings.
The “central task” of reparations policy is to raise the level of Black assets to a level sufficient to match the average net worth of white Americans, Darity said. Only this will produce the material conditions for full citizenship for Black Americans, he said.
At present, the racial wealth gap exceeds an average of $300,000 per person, Darity said. The enormous expected cost of such a program is due to the estimate that there are roughly 40 million Black Americans whose ancestors were enslaved in the U.S.
For comparison, the full size of the economy is $25.72 trillion in the third quarter.
A reparations program of this magnitude “could finally lead to closure on the harms and damages of the nation’s racial history,” Darity said. Black Americans would have no further claims for race-specific restitution from the government, he said.
Where does Darity’s estimate come from? The destruction of Black property and exclusion of Black people from government programs that created wealth, he said.
At the end of the Civil War, newly freed enslaved people were promised 40 acres by the federal government, but the plan was quickly reversed and shelved.
Since then, Black people were blocked from participating in federal government programs that led to significant wealth, starting with the Homestead Act of 1862 that provided citizens with 160 acres of land and continuing through the G.I. Bill, which gave World War II veterans funds for college and housing.
In addition, Black property was seized and taken in government-sanctioned riots. Later, the expansion of the federal highway system destroyed many Black communities and businesses.
“‘It is impossible’ for states and localities to produce a program to eliminate the racial wealth gap, given that they are tax-constrained.”
Under Darity’s plan, recipients of reparations would have to prove they have at least one ancestor who was enslaved in the United States. (Many activists disagree with this approach and believe that descendants of Black immigrants, who also may have faced racial discrimination in the U.S., should be included.) The individual would also need to have self-identified as Black or African American for a dozen years before the reparations plan was approved.
To minimize the risk of inflation, the reparations plan might not come in the form of cash transfers, Darity said. The funds could be provided in the form of less-liquid assets like endowments, trust funds or annuities. The payments could be spread out over several years, but no longer than a decade. The eligible recipients should have full discretion over the funds.
Among proponents of reparations for Black Americans, there are many schools of thought on the size, scope and form of compensation that would be involved, as well as who should be eligible. Several reparations initiatives across the country are underway, including California’s first-in-the-nation state-level task force, for which Darity served as a pro-bono consultant; local-level efforts in cities like Evanston, Ill., and St. Paul, Minn.; and movements on college campuses.
Darity, for his part, said the federal government is responsible for making the payments. “The federal government is the only capable party — the only party that has the capacity to meet a debt of $14 trillion,” he said.
“It is impossible” for states and localities to produce a program to eliminate the racial wealth gap, given that they are tax-constrained, he added.
H.R. 40, a repeatedly reintroduced House bill that would establish a $12 million commission to study and propose reparations for African Americans, remains stalled in Congress. The White House has said President Biden supports “a number of components of the bill, including the funding and the proposal for a study.”
Darity said the current political environment for reparations “is more propitious than any other moment in my lifetime.”
The economist cited a nationwide 2021 University of Massachusetts Amherst/WCVB poll in which nearly 30% of white Americans endorsed monetary payments as reparations for Black Americans. (A 2021 Pew Research Center survey found a lower share of white Americans, 18%, supported some form of reparations for descendants of enslaved people.)
That’s up from 4% in 2000, Darity says, referencing a separate survey conducted by University of Chicago researchers.
“The big issue is whether or not that trajectory can be sustained,” Darity said.
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