Reparations and Other Money-Printing Fantasies

By James Malloy Published on September 3, 2020

“Mayors back reparations that could cost $6.2 quadrillion, or $151M per descendant.”

The above is the title of an article in the Washington Examiner by Paul Bedard, published July 13, 2020. The cost, he quotes from a study by three college professors. They reportedly used a complicated formula to estimate the price tag for slavery reparations they believe equitable.

He also cited a letter from the U.S. Conference of Mayors. It supports slavery reparations legislation proposed by Sen. Cory Booker of New Jersey and Rep. Sheila Jackson Lee of Texas, After, of course, a study to determine the scope. The letter stated, among other things:

We recognize and support your legislation as a concrete first step in our larger reckoning as a nation, and a next step to guide the actions of both federal and local leaders… .

What Are They Smoking?

My initial thought was, this must be a joke. It’s not. Mostly sane civilizations produce some crazies, but who’s at fault when inmates run the asylum? Aren’t we ultimately in charge? We elect these people and send our kids to expensive colleges full of extremist professors. A confluence of bad ideas will lead to disaster. If one hatched a plan to destroy America, how would he do it?

Now, even if the price tag the college professors support isn’t in legislation, where are they going with this? Why are we talking about it at all? Because money is something politicians think grows on trees? Our political leaders have already spent us into a higher debt to GDP ratio than we’ve ever had. Higher than after World War II! Think about how expensive that war was. Our leaders did this to us, mainly in peacetime! Remember, corrupt theories produce bad results.

A First Step Off the Cliff

What could these lawmakers possibly mean by “a concrete first step?” It’s a solid foundation on which to build what? What’s the “next step?” What does a “larger reckoning” entail? How high a price could we possibly pay for other peoples’ past evils? Who in this country has ever owned enslaves? Who’s been a slave? Do our children deserve this price tag even if they could pay off that much?

Is there a big difference to our grandchildren if the country goes into debt implosion when they’re five, or twelve years old?

People of color from around the world struggle to get to the USA, many of them deliberately breaking the law in dangerous circumstances. Has anyone enslaved them? Is slavery legal? No, they come here for the freedom to pursue happiness. They still perceive American exceptionalism.

Haven’t we spent a fortune on Great Society Programs, the War on Poverty, and Affirmative Action? Why haven’t they ended poverty, urban blight, or high crime in our cities? The more political power the left assumes, the worse the destruction in our cities and states. Has Saul Alinsky’s army of community organizers brought prosperity or reduced violence? None of it works because the theories behind it all don’t work. The leftist answer? Spend more! They don’t just double down on it, but 6.2 quadrillion down on it! Now that’s a concrete first step!

Money Grows on Printing Presses

Democrat politicians want our trust. Have you ever heard them run on anything but unbelievably reckless spending? How much better are the Republicans? At least a handful of GOP Congress members support a plan to balance the budget, although the media doesn’t cover it much. With the Coronavirus-panic, it’s all spending all the time now.

Our politicians are currently fighting over printing and borrowing another $1,000,000,000,000 to $3,000,000,000,000, in the short term, as part of more immense ongoing “aid.” Wouldn’t it be great if they understood we support the government; it doesn’t carry us? Unless they want society to collapse.

Human incentives and personal dignity escape left-wing solutions completely. Why are Republicans so eager to engage in the immoral behavior of spending what we don’t have too? We might last a bit longer under Republican leadership. But is there a big difference to our grandchildren if the country goes into debt implosion when they’re five, or twelve years old?

No Moral Courage

The problem is the underlying theories and a lack of moral courage. Yes, the Democrats are willing to buy votes with printed and borrowed money despite what might happen to their families in ten or twenty years. So should the Republicans do it too? They might rationalize it by saying if they don’t, the Dems will gain full control and do more damage … .

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The thing is, many Republicans know better. But they won’t do the right thing. They take the path of least resistance, to win power. Instead, they ought to be persuading voters not to wreck their own country.

The Communist Manifesto is a template for many of Bernie Sanders‘s speeches. He starts with class conflict, demonizes the ownership class, and calls for a political revolution to bring power to the workers. Alexandria Ocasio Cortez is even more explicit. Virtually the only economic answers Joe Biden and Nancy Pelosi have are Keynesian.

Keynes: Slow Motion Socialist

Keynes believed the government must control the instruments of production and the rewards to those who own them. He is considered the right-wing of the Democratic political spectrum, of course.  

In many cases, the Dems don’t know better. Providing reparations will cause economic growth and right past wrongs! They’ve swallowed their professors’ indoctrination hook, line, and sinker. The imaginary Keynesian fiscal multiplier will bring back more than we invest. Social engineering at its best! Give them all money, and they’ll feel rich. We’ll all be more prosperous. Leftist economic theories conveniently fit in with their social views.

Cut police funding when crime spikes, give people money who won’t live responsible lives and spend our way out of financial trouble! See a pattern? We’re not prepared for emergencies and don’t follow good policies when they come because we believe in erroneous theories. From Karl Marx on their left to John Maynard Keynes on their right, the Dems are irrational because of what they believe. Isn’t proposing another $6,200,000,000,000,000 to the national debt proof?

Hate Thy Father

They’ve turned up the heat by blaming us all for something some Americans’ ancestors did long ago. It’s true Sen. Booker and Rep. Jackson Lee, and their cohorts, will push for slavery reparations forever. But even if they got them, it would never be enough. They think they’ll extract “justice” from everyone’s children by making present and future Americans perpetual slaves to our national debt. Much more likely we’ll fail to meet our obligations. In default, we’d end up on our knees, as Argentina did.

We’re used to the government spending money we don’t have since we began following demand-pull economic theories in the year 1931. We don’t seem to care that we’ve agreed to pay a bill.  It’s worked until now, pass it on to the next generation. Who cares about the kids? Spend more! Now add the Green New Deal. It may only cost $93 trillion over the next decade, according to the American Action Forum. Bernie Sanders has plenty more ideas for spending. “Freedom” for him means free everything!

Don’t worry. They have it all penciled out! Defund the police and cut military spending too. Side with our enemies, so they’ll like us! Send Iran more pallets of cash! Call the looting, burning, and violence against the innocent a “summer of love!” Perception is reality! Right? 

At present, our government has so much debt that if interest rates were comparable to the late ‘70s and early ‘80s, we wouldn’t be able to pay our bills now. If we submit to their demands, we won’t be able to meet our obligations at all. Poof! There goes America.

 

James Malloy is author of Economic Clarity or Political Confusion. Sample his book here: econclarity.com.

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