Ms. Hannah-Jones interviews Duke College economist William A. Darity, probably the most distinguished educational voices behind the $13 trillion quantity. Darity has superior related greenback quantities in his scholarly work, together with a 2022 article within the Journal of Financial Views. As with the Hulu episode, he affords this determine whereas eliding troublesome questions on financing this redistributive payout.
Vaguely sensing that there’s no such factor as a free lunch, Hannah-Jones asks the place the federal authorities would get the cash to pay such an enormous quantity. Wouldn’t taxes should be raised, she queries. Mr. Darity confidently asserts that no such motion is important.
“It’s a matter of the federal authorities financing it in the identical approach that it financed…the stimulus package deal for the Nice Recession” and the COVID-era CARES Act, Darity continues. To take action, the federal authorities want solely “spend the cash however with out elevating taxes.”
This verges on tooth-fairy economics.
That is from David R. Henderson and Phillip W. Magness, “The Tooth-Fairy Economics of Slavery Reparations,” American Institute for Financial Analysis, March 7, 2023.
One other excerpt:
If the Federal Reserve monetized the entire quantity, base cash, which is foreign money in circulation plus financial institution reserves, would enhance by $13 trillion. M2, the standard measure of the cash provide, is 3.96 instances the financial base. If that relationship held, then growing the financial base by $13 trillion would enhance M2 by 3.96 instances $13 trillion, which is $51 trillion. M2 is at present $21 trillion. $51 trillion is a whopping 245 % enhance. So if the spending occurred multi functional 12 months, inflation can be about 240 %. Vital Race Principle would unite with Trendy Financial Principle in an inflationary spiral.
Because of Jeff Hummel for checking our M2 numbers in an earlier draft.
Learn the complete factor.
