Why Reparations Are Needed to Close the Racial Wealth Gap


Furthermore, in the 20th century, the federal government promoted homeownership in a harshly discriminatory manner that benefited white households and sidelined African Americans. For example, the Federal Housing Administration excluded Black Americans from programs that granted white applicants access to easy credit for home buying. And while the G.I. Bill aided veterans returning from World War II in home buying and business development, these provisions were applied unevenly, often to the detriment of Black people. In short, the federal government fostered white asset ownership and helped build the racial divide in wealth.

The federal government is not only culpable; it is the only government entity capable of meeting the reparations debt. All state and municipal annual budgets combined amount to less than $3.5 trillion. If they were even to attempt to meet a bill of more than $11 trillion collectively, they would have to devote all of their financial resources to reparations for four consecutive years, disabling their ability to provide any services to their constituents.

The federal government’s response to the 2007-9 Great Recession and to the current pandemic demonstrate that it can rapidly mobilize resources and spend huge sums without raising taxes. Federal expenditures to mitigate the economic impact of Covid-19 now exceed $6 trillion. The resources for reparations can be mustered.

But progress so far has been scant. Proposed congressional legislation to establish a commission on African American reparations does not provide assurance that redress would be forthcoming. Among its flaws, the bill, H.R. 40/S. 40, includes no directives that might guide a commission or ensure that it produces a reparations plan capable of eradicating the gulf in wealth.

As a practical matter, our book outlines two criteria that could be used to establish eligibility for receipt of reparations. First, the government could impose a lineage standard: An individual would need to have at least one ancestor who was enslaved in the United States.

Second, there is a need for an identity standard: Reparations recipients would need to show that, for at least 12 years before the enactment of a reparations plan or establishment of a study commission for reparations, they had self-identified as Black, Negro, African American or Afro-American. This criterion would prevent someone who is living as white from suddenly claiming eligibility for reparations when there is a monetary gain to be had from being the descendant of an enslaved person.

Congress would need to authorize the Treasury and the Federal Reserve to make the payments.

Reparations may be summarized as a program of acknowledgment, redress and closure for grievous injustices. Acknowledgment is a culpable party’s admission that it has committed a horrendous wrong, accompanied by a promise to make restitution. Redress is the act of restitution, involving direct compensatory payments to members of a victimized community. Closure is mutual recognition by the culpable party and the victimized community that redress is sufficient and that the account is settled.



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