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What if the rich lost 40% of their wealth?

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posted on Jun, 14 2012 @ 01:41 PM
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(CNN) -- Let's imagine that yesterday there was a front page story in The New York Times that read the following:

"The recent economic crisis left the top 1% of Americans in 2010 with no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity, the Federal Reserve Monday.

"A hypothetical family richer than the median net worth of the top 1% of the nation's families had a net worth of $77.3 million in 2010, compared with $126.4 million in 2007, the Fed said. The crash of the stock market, in addition to the collapse of housing prices in Greenwich, Connecticut, the Upper East Side of New York City, Beverly Hills, Highland Park in Dallas and the North Shore of Chicago, directly accounted for three-quarters of the loss."

Carville:What if the rich lost 40% of their total wealth?

The rich didn't lose 40% of their wealth, I have to assume the 40% of wealth lost by the middle and lower class went straight into the pockets of the wealthy.

Redistribution of wealth did indeed happen.

edit on 14-6-2012 by LDragonFire because: (no reason given)




posted on Jun, 14 2012 @ 01:46 PM
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reply to post by LDragonFire
 


Even if the rich did lose 40% of their wealth.....They would still be RICH!!

They still would be considered in the 1%......

Give me 150 million and take 40%.....Go ahead, see if I care!!



posted on Jun, 14 2012 @ 01:48 PM
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This is what I think most people don't seem to understand.

We DO have redistribution in the country, but it is occurring the opposite direction that most are afraid of.

Why is it okay for wealth to distribute up but not down?

Oh, and lets go ahead to stop all distribution now that the middle and lower class has been robbed


Keep looking down to blame problems on the poor and government workers, instead of up where the real power players are #ing you 100x harder daily.



posted on Jun, 14 2012 @ 01:49 PM
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Yeah but a lot of people on ATS only seem to think that a redistribution of wealth is only a bad thing if it goes from rich to poor and not the other way around.

They are more mad over food stamps than they are corporate welfare but claim to be capitalist.



posted on Jun, 14 2012 @ 02:03 PM
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Originally posted by RealSpoke
Yeah but a lot of people on ATS only seem to think that a redistribution of wealth is only a bad thing if it goes from rich to poor and not the other way around.

They are more mad over food stamps than they are corporate welfare but claim to be capitalist.
Wrong. I oppose corporate welfare, paying farmers not to grow crops, foreign aid, and all the other tax wasting schemes out there.



posted on Jun, 14 2012 @ 02:05 PM
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reply to post by LDragonFire
 

Rather than pick up on RealSpoke's thought-provoking comment, let me question your assumption

The rich didn't lose 40% of their wealth, I have to assume the 40% of wealth lost by the middle and lower class went straight into the pockets of the wealthy.
Most of the wealth of the middle and lower classes are in their homes and their retirement plans. With the housing and stock market crash that wealth disappeared, it didn't go to the wealthy.

If your $150,000 house is now worth $100,000 you've lost a third, and who knows how much your 401(k) lost.



posted on Jun, 14 2012 @ 02:10 PM
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The fact is that most of the 40% wealth reduction is a result of the housing bubble. It was fake wealth in the first place. The houses never had an intrinsic value as much as the inflated value. For most people, their net worth is in their homes. In my area someone who bought a house for say $270K in 1995 or so wound up with a house worth $650K at the height of the boom. Was it really worth that much? If someone wanted to buy it it was, and a few people cashed out and took the dollars.

Most did not, so now that very same house is worth maybe $400K, still more than what they bought it for, but someone comes along with a spreadsheet and proclaims, "You lost 40% of your wealth!" and then we get threads like this complaining about it. The bubble was fake. Anyone with half a brain could see that it eas fake. The true worth of that house is probably still less than $400K. Smart people saw the bubble and bailed at the top.

Stupid people didn't. Indeed, they made it worse. They thought it would never end. They thought it would keep going up and up and up and up, and they would wind up a 1%er. they thought they'd get rich.

I have a "friend" who did exactly that. This is his story. Read it and avoid it like the plague. he had a good job in commercial construction. REALLY good money. He had a nice enough house, three bedrooms in a nice enough community. Not really ritzy, but in a "nice" neighborhood. He paid $190K for this house, then the bubble started. He REALLY wanted to live on "The Lake" so here's what he did. The house was now worth $290K. He re-financed for $280 and suddenly he had a wad of cash. He took this cash and put it down on a house on the lake worth (supposedly) $900K. He rented the first hopuse for less than his payment and moved to the lake house with a $800K mortgage on it.

But the house went up in value, first to a million, then 1.2, then $1.3 million! So what did he do? He re-financed the lake house for a cool $1million, and had another wad of cash. he bought a speedboat, re-did the kitchen in granite, bought a new truck. Fun! Fun! Fun!

THEN what happened? The bubble broke about the same time his septic tank failed. He abandoned the house and left the weeds growing. He and his wife got a divorce for purposes of the house. He Quit Claimed the house to her, who has no job. "They" stopped making payments on it. So the big bad bank will eventually foreclose. the house might be worth $500K now, only because it has some acerage. IF the bank can sell it for $500K, they will be out $500K, i.e.: They will have to absorb that loss.

But, of course, it's all the bank's fault.



posted on Jun, 14 2012 @ 02:12 PM
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Originally posted by charles1952
reply to post by LDragonFire
 

Rather than pick up on RealSpoke's thought-provoking comment, let me question your assumption

The rich didn't lose 40% of their wealth, I have to assume the 40% of wealth lost by the middle and lower class went straight into the pockets of the wealthy.
Most of the wealth of the middle and lower classes are in their homes and their retirement plans. With the housing and stock market crash that wealth disappeared, it didn't go to the wealthy.

If your $150,000 house is now worth $100,000 you've lost a third, and who knows how much your 401(k) lost.


If thats true then it wasnt real money in the first place, just like many people have been saying for a long time now.



posted on Jun, 14 2012 @ 02:16 PM
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I think it's kind of ironic that the few and far between winners of gigantic lottery dollars immediate lose about 40% - if not more - to taxation and the like (never mind the change in tax rate since they are now "rich")...

So evidently, it's formulaic that 40% of the wealth IS for the government.....

Simplistic - probably wrong - but nevertheless funny to a layman like me.



posted on Jun, 14 2012 @ 02:30 PM
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reply to post by LDragonFire
 


Well, if it was 40 percent of "real" wealth, I am talking about overseas holdings financial and physical.
The budget would be fixed, and the "rich" would still be years....light years ahead of most of the public.
We might even get a middle class back.
However if you have ever played a game with a competitive person, you must realize that there are people that way with their monies.
Silly idea i know, forsake the world and probable peace for some toilet paper...



posted on Jun, 14 2012 @ 02:31 PM
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reply to post by charles1952
 


The point of the article is that the wealthy didn't lose 40% of their wealth.



posted on Jun, 14 2012 @ 02:45 PM
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reply to post by LDragonFire
 

Dear LDragonFire,

Thank you, I'm enjoying (speaking?) with you. And I agree with you, the rich didn't lose 40% of their wealth. But I think you can see why. They had a smaller piece of their pie tied up in a home, and more was sent to precious metals, bonds, Treasuries, and other places where the losses weren't so severe. They lost and lost big on a dollar basis, but not so much as a per centage of their wealth.

The problem with the homes is that people confused what they hoped they would be able to sell them for, at some point in the future, instead of what they actually could.

Schuyler has a great post on that point up a few posts.

With respect,
Charles1952



posted on Jun, 14 2012 @ 02:50 PM
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If the rich lost 40%?? Well theyd still have more than me.. or the majority of Americans.


The redistribution of wealth is alive and kickin.. it just redistributes up hill.



posted on Jun, 14 2012 @ 02:56 PM
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I'd say this is proof that NONE of you have even a faint clue as to what is STILL going on.

This might help:




posted on Jun, 14 2012 @ 02:56 PM
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reply to post by charles1952
 


I agree some of the losses can be because of ignorance, but the middle and lower class is not capable of manipulating the markets like the wealthy do.

Its been proven the lower and middle class lost 40% of there wealth and the top 1% did not.

If the 1% did lose 40% of wealth (from the article):


The elite would call for the suspension of habeas corpus, the government would call out the National Guard, invade Honduras and the Supreme Court would announce that it is in session 24/7 to take any action deemed necessary to help their friends.

The Wall Street Journal would have a black border on the newspaper. The Financial Times would go from pink to gray. CNBC would play funeral music for nine months. Steve Schwarzman would compare it to the H-word. Cable networks would roadblock all coverage.

Minimum wage laws would be suspended, the 40-hour work week would be thrown out, perhaps they would even do away with child labor laws to get productivity up so profits could increase to make up for lost revenue.


Basically heaven and hell would have been moved to fix this problem but considering it was only the middle and lower classes that lost this wealth its a non issue.



posted on Jun, 14 2012 @ 03:07 PM
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reply to post by schuyler
 


And this is the same issue with the wealthy-elite. Their wealth is based upon the current value of their investment portfolio. What's it really worth? What would someone pay for it today? For the middle class their investment portfolio was largely their homes. The wealthy-elite played fast-and-loose with investment rules and laws and pooched the housing market and the economy at-large. The difference is, THEIR investments were in banking and financial sector instruments. That sector used its power and influence to get the government to make-whole their on-paper losses by getting taxpayer-funded bailouts. Our mortgage principals were not adjusted.

So, the stock market et al came roaring back. The big banks and investment firms (for the most part) recovered quickly and in may cases in-spades. But no consideration was given to our losses. We lost homes, home value, businesses, jobs, retirement accounts, benefits and no one at the top gave a rat's tush. They accomplished their remarkeable turn-around by watering-down the value of our currency so our expenses have gone up. For the middle and lower classes, those expenses make up a disporportionately larger share of their HH income.

Color this whole thing anyway you want but we were screwed and left with the bill.



posted on Jun, 14 2012 @ 03:23 PM
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reply to post by LDragonFire
 

Dear LDragonFire,

Oops! Sorry. I didn't mean to imply that the lower and middle classes lost through ignorance. Sure, with 20/20 hindsight a lot of it could have been avoided, but very few people have that kind of vision. Besides, when your money is tied up in a house, cars, and expenses, you don't have any room to go play with the markets.

I'm not condemning anyone who took a big hit. (Well, maybe I am condemning those really greedy people, but not the good guys.)

With respect,
Charles1952



posted on Jun, 14 2012 @ 03:27 PM
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If the government can take away %40 of their wealth the government can take away %70 of your salary.

That's why you should care.

Especially if you care about rights.



posted on Jun, 14 2012 @ 03:43 PM
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The rich did lose a good chunk of their wealth with the financial collapse, they just got bailed out with the middle class tax dollars. In gratitude I'm sure, the rich, gave the middle class a big fat Foreclosure sign...probably also paid for with our tax dollars.



posted on Jun, 14 2012 @ 04:02 PM
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reply to post by Kali74
 

Dear Kali74,

Good to see you again, and nope, I'm not stalking you. (I was here first, Nyah-nyah on youuu.) I'm not really a big global banker, conspiracy, Zionist, One World Government, type. BUT . . .

In the 2008 election Obama really beat McCain in fundraising on Wall St. A lot of wealth was tied up in stocks. The Quantitative Easing (read, money printing) that the Fed and Treasury have cooperated in did at least two things; provide more money for investments, and drove up the price of everything (including stocks). These effects have kept the investors in better shape than they would have been otherwise. And you're right, the cost was borne in large part by those lower on the food chain.

As you point out, the bailouts also protected the interests of some large banks and corporations and were also paid for by taxpayers. The latest estimate I've seen is that if the government sold the stock it held in GM, it would lose $16 Billion.

I don't intend to start a political war, but I wouldn't have minded Obama quite so much if the stuff he did worked.

With respect,
Charles1952




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