May 13, 2023

The California reparations controversy continues to spin out of control as we head for either a major confrontation or hyperinflation.  It appears that Governor Gavin Newsom will reject the latest proposal, but expectations have already been stoked to the point where politicians will have no graceful exit. Less than two months ago it appeared that the California Reparations Task Force was set to recommend reparations payments in the amount of 640 billion dollars (despite California’s total budget of less than half that amount). That number has since increased to 800 billion dollars in what is reported as a “cautious” estimate.

‘); googletag.cmd.push(function () { googletag.display(‘div-gpt-ad-1609268089992-0’); }); document.write(”); googletag.cmd.push(function() { googletag.pubads().addEventListener(‘slotRenderEnded’, function(event) { if (event.slot.getSlotElementId() == “div-hre-Americanthinker—New-3028”) { googletag.display(“div-hre-Americanthinker—New-3028”); } }); }); }

Activists have denounced even this amount as insufficient while demanding 200 million dollars per person. It is apparent that the demands will only go higher.

Resist the temptation to feel secure if you do not live in California. The reparations movement has metastasized throughout the United States.  A similar task force exists in Detroit that may soon become the bane of Michigan taxpayers. At least 95 colleges now consider varying degrees of similar proposals for draining their own coffers.  Activists in Chicago push for one billion dollars in reparations related to recent “gentrification” issues.  A Duke University professor has advocated reparations nationwide totaling 12 trillion dollars.  His demand has since grown to 14 trillion dollars. A Denver councilwoman has proposed reparations to be funded by a special tax on white-owned businesses.

The numbers are staggering. More staggering is the callousness with which those that know better throw these numbers around with little regard for math, morality, or realism of any kind. These proposals feed on each others’ momentum and take no heed of the immorality of stealing from those that neither owned slaves nor descended from slaveowners. Numbers are now mere playthings plucked from the air.

‘); googletag.cmd.push(function () { googletag.display(‘div-gpt-ad-1609270365559-0’); }); document.write(”); googletag.cmd.push(function() { googletag.pubads().addEventListener(‘slotRenderEnded’, function(event) { if (event.slot.getSlotElementId() == “div-hre-Americanthinker—New-3035”) { googletag.display(“div-hre-Americanthinker—New-3035”); } }); }); }

Perhaps the most telling comment was linked on MSN.com, as the “journalist” involved devoted most of the available space to eligibility and the various wrongs targeted by the proposals. The article closed by noting, “there are not yet details on how the payments would be funded.” This comment appeared almost as an afterthought.  They have reduced the crucial element of payment to an afterthought because there is no solution to this problem.  Trillions of dollars simply do not exist even for existing government programs or for paying off the old debts. They certainly do not exist for new programs. The national debt is higher than any government has ever repaid in history.

Governments have tried to create money from nothing since the beginning of recorded history. Ancient emperors watered down their gold supply by adding molten lead. They shaved the edges off of gold coins in an effort to stretch the gold supply.  None of it worked. Prices exploded.  Empires collapsed. Today’s government printing press, aided by fractional reserve banking and federal reserve monetary policy, is a dressed-up version of the ancient failed attempts to stretch the gold supply.  The mounting federal debt is a monument to their failure. Alchemy of any kind will not save us.

The Reparationists know nothing of the historical failures. They care nothing about the consequences of their childish demands. The activists that demand 200 million dollars per person have little regard that such proposal would cost almost 400 trillion dollars in California alone. They probably neither know nor care how far beyond current debt numbers this demand would take us. We are no longer discussing serious numbers (we have not for a long time). We are, instead, witnessing a slow-motion riot. The rioters are not proposing to govern.  They are breaking down the doors of the treasury.  They will find nothing there.  When they discover the empty vaults, they will not return peaceably to their homes. They will find new targets.  Every new piece of “activism” will be an attack in the ongoing riot.

Many federal programs have contributed to the inflation that has accelerated in the past two years. Reparations would be so much gasoline on that fire. If any portion of the country adopts even a small fraction of the reparations proposals, dollars would be worthless. The numbers are staggering to us, but they would not shock the people of Weimar Germany or other civilizations that were destroyed through inflation. In 1949, the economist Ludwig von Mises  wrote, in Human Action, of the chaos and societal collapse that accompanies runaway inflation:

A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against “real” goods, no matter how much money he has to pay for them. Within a very short time… the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them. It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German Mark in 1923. It will happen again whenever the same conditions appear (pp. 424, 425 (1949 edition)).

While the situation was resolved in America in 1781, the other cited examples resulted in dictatorship and devastating war.