I've been gone awhile from my writing. I guess I haven't had much to say. Today, though, a thought occurred to me, and I did some figuring. I thought I'd share with you the result. Here we go:
We've all heard the statistics. The top 1 percent of wealthiest people in the US hold more wealth than the bottom 90% combined. That sounds pretty ridiculous, but the numbers are so big, it's hard to even focus on what it means. So I spent some time this morning making it accessible.
Here's the scoop. There's around $55 trillion in wealth held in the US. This is wealth, not income. That means that all together, all the stocks and bonds, and cash, and real estate, and boats and cars and 401k plans and houses, and everything that's worth something in the US adds up to that much. It's a BIG number. Such a big number that it means that, if it were equally divided, every single man, woman and child in the US would own about $173,945 worth of stuff, or about $695,780 per family of four. Keep in mind that this is net value, not just assets. That means this is what you have over and above the debt you owe on it--like equity in a home. It's a really big number.
So if we've got so darn much stuff in this country, then why are people struggling? Why are there poor people? Why is it that the GOP got to spend so much time talking about the 47% of people who don't make enough to pay income taxes? Well, here's why.
The top one percent of wealthiest people in America own a bit more than 35% of the total wealth, or about $19 trillion, together. That's distributed amongst about 1.4 million households that make up the 1%, and that's means they have, on average, a net worth of about $13.57 million per household. So, on average, each 1%-household owns almost twenty times the amount that they would own if the wealth in the US were distributed equally, assuming 1%-households of four people each. And that doesn't count the money they're still making and living on, which is also a lot more than regular people have.
Now, here's the thing. If you had a tax that took from those people in the 1% half of their net worth--just half--at some point when it makes sense (like, oh I don't know, an estate tax when they die, perhaps), in just one round of deaths, that would free up $9.5 trillion to do something with. Of course, after another generation, there would be more really rich people, although they probably wouldn't have built up quite so much, but the first $9.5 trillion wouldn't be the last. And it would still leave their heirs with over $6.5 million per family, so they probably won't end up on Medicaid or anything.
So what would $9.5 trillion do? Well, it could wipe out two thirds of the entire national debt, and greatly diminish the interest the fat cat bankers get to charge us on that, which would let more of current taxes go to programs, and not to incurring more debt and debt service. Eliminating two-thirds of the debt would eliminate two thirds of the interest, or somewhere around $275 billion per year that wouldn't get tacked onto our debt. That's one thing, although maybe not the best thing, because that just gives the money back to the big fat bankers that we just took a bunch of it from in the first place. So what else?
It could go to a rebate to everyone in the US. If they took $9.5 trillion and divided it equally, every single man, woman and child in the US could get over $30,000. Most of those people would spend that money fast, paying off debts or buying stuff they need or sending kids to college, and the money would then circulate to someone else in the form of the wages paid to make or sell the stuff they bought or to teach their kids, or whatever. Now, that's not fair, they say, because those people didn't earn it. But, then again, what did the children of the now-dead 1% do to earn it, other than hang around and wait for daddy to kick the bucket? But of course, some people would waste it, so is there a better idea?
Hmmm. You know what else could happen with $9.5 trillion? Jobs. Private jobs, if you lent money to businesses that are wanting to expand but need capital. Public jobs if you spent it fixing roads and bridges and building things we need. In total, $9.5 trillion could pay for 19 million job-years for jobs paying $50,000. That would mean you could make enough jobs to cut our approximately 8 percent unemployment rate in half, to a very nice normal four percent rate, and with all the new work paying well, for more than three years. And of course, those people with jobs would then not need unemployment, food stamps, welfare, medicaid, taking early social security and medicare, etc. And they'd spend that money on crazy stuff like gas and food and clothes, that would keep other people in jobs too. And they'd have to earn it--doing unimportant things like making and building stuff, not nearly as deserving as sticking it in a stock fund and waiting for the checks to roll in, but still.
Or, we could entirely eliminate the estate tax like some propose, and let the 1% accumulate even more. Of course, they're promising that they'll use it all to run businesses that make jobs--or to make fat bank accounts in Switzerland or the Cayman Islands--whichever.