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Reparations for Black Americans would cost trillions of dollars, and it’s time the US government paid up

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  • In a new paper, we at the Review of Black Political Economy estimated that the “40 acres and a mule” promise made to Black Americans after the slavery era is worth over $12 trillion today.
  • This would give each descendant of the enslaved around $254,782.
  • Either the government should pay the amount, or the funds should go into social programs and trust funds.
  • Trevor Smith is a writer and communications specialist who conducts research on the history of reparations within the United States.
  • This is an opinion column. The thoughts expressed are those of the author.

Black Americans are owed trillions of dollars by the government of the United States for the wealth that was built off of the backs of their ancestors during slavery, as well as the subsequent laws that prevented them from creating or attaining wealth through the housing and labor market.

In a new paper, Wealth Implications of Slavery and Racial discrimination for African-American Descendants of the Enslaved, my co-authors and myself present various estimations of how much exactly is owed to Black Americans, and why a focus on closing the racial wealth gap is the truest path toward racial justice.

Various ways have been proposed to estimate the present value of past injustices: estimating how much the promise of ‘40 acres and a mule‘ would be worth today, the value of how much slave owners gained, and how much wages were lost as a result of slavery. As we show, while the amount that is owed and how it is calculated is up for discussion and research, there can be no question that reparations from the US government are owed to Black Americans. 

The wealth gap is the most comprehensive indicator of the long-lasting legacy of white supremacy in this country. The median Black household has just one-tenth the wealth of the median white household. Given the enormity of the racial wealth gap, only a substantial wealth transfer such as reparations, similar to what was given to Japanese Americans after World War II, will take the necessary steps to close it.  

What a reparations package could look like

According to our research, a reparations package that would fulfill the broken promise of 40 acres and a mule to Black Americans would cost around $12 trillion, giving each descendant of the enslaved $254,782.

A package based off of how much capital the enslaved lost throughout slavery with a 3% interest would cost $18.6 trillion, giving each descendant $397,459.

If the US were to deliver something similar to the reparations that Japanese families received after their internment during World War II , the package would cost $35 trillion including interest, giving each descendant $850,707. 

If a reparations package is advanced, some of these funds should go directly to Black Americans, but there are other proposals that could also fall under the reparations umbrella. These include the establishment of a trust fund for eligible Black Americans, growing the endowments of Historically Black Colleges and Universities (HBCUs), or subsidizing the cost of college for Black Americans at predominantly white universities. 

It is time to move forward

In their new book on reparations for Black Americans, authors Sandy Darity and Kirsten Mullen recount how, at several moments in American history, the “trajectory of racial inequality could have been altered dramatically, but at each juncture, the road chosen did not lead to a just and fair America.” 

This year will go down as one of the most significant and influential in American history: a global pandemic, an election year with a woman of color on a ticket against the most outspoken white supremacistincumbent since Woodrow Wilson, and the fact that white Americans are collectively shifting their attitudes on racial inequality.

It is clear that the United States yet again sits at a fateful crossroads, but it is unclear whether we will finally take the path never traveled toward racial justice or continue on the path we’ve too often taken that has uplifted white supremacy. 

The first state-sanctioned peacetime intervention effort to address racial inequality, which we recognize as the first Reconstruction era, spanned from immediately after the Civil War until 1873. Primarily through the Freedmen’s Bureau, the government sought to enfranchise 4 million newly-freed Black people and assimilate them into American society as equal citizens.

While arguably the most significant attempt to establish racial equality in this country’s history, it can be stated with confidence today that the first Reconstruction era was largely a failure, due to the lack of land or capital that was transferred to the formerly enslaved. As W.E.B. Du Bois stated, “the slave went free: stood for a brief moment in the sun; then moved back toward slavery.”

Monumental change did indeed come in the forms of the 13th, 14th, and 15th amendments, laying the path for the second Reconstruction of the 1960s Civil Rights era. But the COVID-19 pandemic has exposed the structural inequities that still exist within our country, due to the federal government’s refusal to provide the equal opportunity at gaining wealth and power.

The promise of 40 acres and a mule — while laughable to many today — would have been the most comprehensive policy reform, and would have put Black Americans on a more equitable path to build wealth similar to their white counterparts. 

Since then, racism and discrimination, particularly in the housing and labor market, have blocked Black Americans from any substantial form of economic mobility. Wealth, a person’s assets minus their liabilities, is the best indicator of the intergenerational effects of white supremacy on black economic well-being, and the less one possesses, the fewer opportunities one has for upward mobility.

The massive wealth gap — which will only be worsened by COVID-19 — can be attributed mostly to the fact that white families have historically received large amounts of inheritances and beneficial public policies (land through the Homestead Act of 1863, affordable mortgages and education through various New Deal acts) while Black Americans have been blocked from fully participating in the housing and labor market. 

After George Floyd, a Black man, was accused of using a counterfeit bill at a store, officer Derek Chauvin crushed his knee into the back of his neck for 8 minutes and 46 seconds, sparking protests that have lasted for months and calls for anti-racist legislation that will reverse the centuries of oppression placed on Black people.

What all started with a counterfeit bill has led to months of protests, millions lost in destruction of property, and more lives lost. If anything, Floyd’s killing illuminates the need to focus on eliminating the racial wealth gap in this new era of Reconstruction. 

Last year, the Center for American Progress published a report that simulated how progressive policies would affect the racial wealth gap. It found that if policymakers passed five major policies aimed at decreasing the wealth gap such as baby-bonds or debt free college, white households would still have almost twice as much wealth on average than Black people. 

It is clear that an intentional reparations policy that seeks to transfer wealth directly to Black people is the only way to address the economic harms of the past 400 years. 

The first question that often arises around the reparations conversation is how it would be possible to calculate the cumulative economic effects of something that happened so long ago. Exactly how much a reparations package should cost, the sectors that it should touch, and whether what is proposed is acceptable can only be determined by Black America.

What is quite clear is that for the United States to commit to advancing racial equality is for the United States to commit to eliminating the racial wealth gap, which has ballooned to an exorbitant amount because of intentional racist legislation that kept Black Americans from gaining wealth.

Trevor Smith is a writer and communications specialist who conducts research on the history of reparations within the United States. He is particularly interested in examining the history of the racial wealth gap. He has a Master’s in Public Administration from New York University and a Bachelor’s in Journalism from American University. 

Read the original article on Business Insider

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