Sep 29, 2020 - Economy

Brookings fellow predicts reparations could happen in next 10 years

Thanks to growing momentum and changing attitudes among Americans, Brookings Institution fellow Andre Perry predicts that within 10 years the U.S. will provide some form of reparations to Black people.

What we're hearing: "What's happening in the streets today is indicative of the attitude change that is occurring in America," Perry, a scholar-in-residence at American University and author, said during our interview for "Axios on HBO."

  • "When I look out there, it's a much more diverse coalition than I've ever seen before. And so I'm encouraged that reparations is going to happen."

Why it matters to the market: Recent economic analyses by McKinsey & Company and Citigroup have both estimated that the racial wealth gap has cost the U.S. economy trillions of dollars and will continue to hold back economic growth until it is closed.

  • Citi's global economists estimate that closing the gap would add $1 trillion a year to the U.S. economy over the next five years.

Yes, but: Perry cautioned that while he believes reparations are "a moral debt that is owed to black people" and should be paid out in the form of direct cash or check payments, similar to the $1,200 direct payments that were a part of the CARES Act this year, he expects any reparations provided in the near term will likely be a means-tested fund that benefits some, but not all, Black people.

  • He expects it would provide funding for education, housing or business formation.

The last word: "I do think you're going to see some type of demand and that demand will be heard ultimately," Perry said.

  • "So I think within 10 years you're going to see some form of reparations distributed to Black Americans."
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