American Household Wealth At New High

[MMMMMM]

Just thought this was interesting.

(excerpt) WASHINGTON, March 10 (Reuters) - Rising real estate prices and a resurgent U.S. stock market pushed the net wealth of American households to a record $48.53 trillion in the fourth quarter of 2004, the Federal Reserve said on Thursday.

In its quarterly "Flow of Funds" report, the central bank said household balance sheet values rose nearly $2 trillion above $46.59 trillion in the third quarter. U.S. household net worth pierced a new record in each of 2004's four quarters.

Higher values for real estate, equities and mutual funds led the fourth quarter net worth jump, the Fed said. Pension fund reserves and Treasury securities also posted big gains.(end excerpt)

http://www.reuters.com/printerFriendlyPopup.jhtml?type=bondsNews&storyID= 7868333

[vulturesrow]

Hush MMMMMM, dont you know the economy is struggling? /images/graemlins/wink.gif

[jaxmike]

this is obviously false. the economy is in shambles. the tax cuts have been a terrible thing. people are lined up down city blocks looking for work. /endsarcasm

oh, but lets look at the "progressive" German economy. last i heard there was over 12% unemployment. thats proof that liberal ideology works.... works at making you dependent upon the state....

[zaxx19]

....and in turn provides the left with a built in constituency.....

[jaxmike]

thats the only way people would possibly vote for the ignorant [censored] they propose.

[andyfox]

I think there are about 110,000,000 households, so that works out to about $436,000 per household as the mean. I wonder what the median is.

[Chris Alger]

"A household in the middle — the median household — has wealth of about $62,000." Edward Wolff, Multinational Monitor (http://multinationalmonitor.org/mm2003/03may/may03interviewswolff.html), May 2003

Which gives you some idea about how absurd it is to talk about "American households" in this context. It's like saying that "many households" saw their wealth increase by 16% last year, ignoring that these are the billionairs, according to Forbes (http://money.cnn.com/2005/03/10/news/newsmakers/forbes_billionaires/index.htm?cnn=yes).

One fifth of America has no net wealth that any increase could affect and are further away from accumulating any due to escalating housing prices. Most of the rest of us have an appreciated but illiquid house during what Greenspan has called a "bubble" in real estate. The only real news is that efforts to concentrate more wealth within the already wealthy are succeeding.

[Screwtape]

So you are saying people are lining up in the streets to find work

[andyfox]

Where do you see he said that?

The original poster cited an article which said that Americans' wealth was at an all-time high. I estimated the average (mean) wealth per household and questioned what the median was. Alger responded. His point is that totals and averages can sometimes serve to obscure differentials between the top and the bottom.

[Chris Alger]

[ QUOTE ]
So you are saying people are lining up in the streets to find work

[/ QUOTE ]
No, but I suppose you must mean during their lunch hour? The vast majority of people who have no net wealth either work or live in families with someone who does. Two-thirds of the poor live in wage earner families, and the poor are just the bottom 12% of the population.

[adios]

[ QUOTE ]
The vast majority of people who have no net wealth either work or live in families with someone who does. Two-thirds of the poor live in wage earner families, and the poor are just the bottom 12% of the population.

[/ QUOTE ]

Just think if these folks could divert some of their after tax $ FICA payments to private accounts to build some wealth what a difference that would make in these statistics.

[cardcounter0]

This is really stupid. Let's take a third world country like Brazil. Very small ultra rich class, very large very poor class.

Simple example:
1 household has $1 million. 999,999 households have $1. Average household wealth = $2.

Brazilian Coffee Bean Futures take a sky rocket ride.

Now, 1 rich household, able to play the futures market has $10 million dollars. The rest of the 999,999 poor households still have their $1. Average Household wealth = $5.50

Yippeeee! Average Household wealth has increased over 100%! Good Times are here again!
/images/graemlins/grin.gif

A vibrant third world economy coming to America soon. Brought to you by Bush and Partners, Inc.

[Chris Alger]

How would a slightly better pension increase the problem of having no net wealth? Wealth refers to balance sheets, not income. The incomes of the working poor wouldn't be improved a bit.

[James Boston]

[ QUOTE ]
One fifth of America has no net wealth that any increase could affect and are further away from accumulating any due to escalating housing prices. Most of the rest of us have an appreciated but illiquid house during what Greenspan has called a "bubble" in real estate.

[/ QUOTE ]

Well said.

[James Boston]

[ QUOTE ]
A vibrant third world economy coming to America soon. Brought to you by Bush and Partners, Inc.


[/ QUOTE ]

I agree with everything you said with the exception of what I've quoted. Bush is by no means helping the problem, but spotlighting him as the cause of the problem is also wrong. Both parties benefit from that 1 rich household (or approximately 15,000 households here in the US), and neither have a desire to fix the problem.

[cardcounter0]

I think Bush, has for some reason, befuddled the herd into his "ownership" society, and so he has rapidly increased the rate of seperating the few rich from the many poor.

I laugh everytime I see an old rusted out Honda with a W sticker on it. Do these people think the "ownership" society extends all the way down to the ownership of a $500 car?
/images/graemlins/grin.gif

[adios]

[ QUOTE ]
How would a slightly better pension increase the problem of having no net wealth?

[/ QUOTE ]

No

[ QUOTE ]
Wealth refers to balance sheets, not income.

[/ QUOTE ]

Did I say otherwise?

[ QUOTE ]
The incomes of the working poor wouldn't be improved a bit.

[/ QUOTE ]

Did I say that there would be an improvement? In improvement on the balance sheet as you put it though would most certainly result.

[adios]

[ QUOTE ]
Both parties benefit from that 1 rich household (or approximately 15,000 households here in the US), and neither have a desire to fix the problem.

[/ QUOTE ]

How would they fix the problem?

[James Boston]

[ QUOTE ]
How would they fix the problem?

[/ QUOTE ]

Well, I didn't claim to have that answer. A few ideas though:

- withdraw FICA taxes on ALL income instead of the first $90K. This would hopefully fix some of the social security problems, and relieve the middle class from taking the burden.
- make adjustments on the alternative minimum tax.
(a tax on deductions that, when created, wasn't designed to adjust with inflation, and now is a bigger burden on middle-upper (but not SUPER RICH) class households.
- stop allowing those who can afford a brilliant tax lawyer to defer taxes for years

just a few thoughts

[adios]

[ QUOTE ]
[ QUOTE ]
How would they fix the problem?

[/ QUOTE ]

Well, I didn't claim to have that answer.

[/ QUOTE ]

Respectfully, it seems that you're relying on politicians to do your thinking for you then. Your expectation is for politicians to work towards a solution to a problem that you don't have many ideas on solving.

[ QUOTE ]
A few ideas though:

- withdraw FICA taxes on ALL income instead of the first $90K. This would hopefully fix some of the social security problems, and relieve the middle class from taking the burden.
- make adjustments on the alternatsive minimum tax.
(a tax on deductions that, when created, wasn't designed to adjust with inflation, and now is a bigger burden on middle-upper (but not SUPER RICH) class households.
- stop allowing those who can afford a brilliant tax lawyer to defer taxes for years

just a few thoughts

[/ QUOTE ]


Just give the government more money and the problem is solved is how I read this. Don't agree at all. Also I think that your proposals if enacted wouldn't have much of an effect on the distribution of income.

[Dead]

[ QUOTE ]
Also I don't think that your proposals if enacted wouldn't have much of an effect on the distribution of income.

[/ QUOTE ]

So you're saying that you think they would have a big effect?

[adios]

You're not quoting my post correctly, do you see why?

[Dead]

[ QUOTE ]
You're not quoting my post correctly, do you see why?

[/ QUOTE ]

Nice editing, adios, too bad I saved a screenshot. I knew you would try and sabotage me. /images/graemlins/wink.gif

http://img221.exs.cx/img221/6289/adios8yz.jpg

I'll let others elaborate.

[natedogg]

[ QUOTE ]
withdraw FICA taxes on ALL income instead of the first $90K. This would hopefully fix some of the social security problems, and relieve the middle class from taking the burden.

[/ QUOTE ]

Anyone, ANYONE, who suggests increasing payroll tax revenues in any way is confused about how this all works. Or they are a member of congress.

Also, even if lifting the FICA cap would actually help Social Security (it wouldn't) how would lifting the FICA CAP relieve the FICA burden on the middle class? They'd still be paying FICA wouldn't they?

FICA should be eliminated entirely, not increased.

natedogg

[andyfox]

"even if lifting the FICA cap would actually help Social Security (it wouldn't)"

Wouldn't lifting (or raising) the cap raise more money for the "fund"?

[James Boston]

[ QUOTE ]
Respectfully, it seems that you're relying on politicians to do your thinking for you then. Your expectation is for politicians to work towards a solution to a problem that you don't have many ideas on solving.


[/ QUOTE ]

I don't understand your point. Isn't this what they're supposed to do? Sure, we all have ideas, but I would like to think our elected officials are working on ideas to improve OUR way of life. I also rely on doctors to come up with solutions when I have a health problem. That's what they get paid for. If we are responsible for the ideas, what are politicians responsible for?


[ QUOTE ]
Just give the government more money and the problem is solved is how I read this. Don't agree at all. Also I think that your proposals if enacted wouldn't have much of an effect on the distribution of income.

[/ QUOTE ]

To make this clear from the onset, I don't know that my ideas would work, but my idea is certainly not to give the goverment more money. It's to give them the same amount of money, but from different sources. If FICA taxes were paid on all levels of income, wouldn't the government be able to lower the percentage of income that is taken?

If 5 people had the following salaries: $30K, $50K, $100K, $500K, and $1 million, and were paying 15% on the first $90K of income, you get $52,500. If they each paid 5% on all income you get $84,000. The $30K and $50K, who probably need the extra money the most, save $3000 and $5000, and you have extra money to "fix the social security problem." Why should a multi-millionair pay the same to FICA as someone who earns $90K a year? If you taxed all income, you could probably lower the rate and get more money.

[James Boston]

I responded in more detail in another post. Please explain to me, if you have the numbers available, how taxing all income at a lower rate wouldn't help. I don't want to remove the cap and leave the rate alone.

[Kenrick]

[ QUOTE ]
I think Bush, has for some reason, befuddled the herd into his "ownership" society, and so he has rapidly increased the rate of seperating the few rich from the many poor.

I laugh everytime I see an old rusted out Honda with a W sticker on it. Do these people think the "ownership" society extends all the way down to the ownership of a $500 car?
/images/graemlins/grin.gif

[/ QUOTE ]

The person is probably a conservative who understands the value of a dollar. You know, unlike liberal elites who think money grows on trees.

[cardcounter0]

If he was a conservative who understood the value of the dollar, then why would he support the fiscal lunacy of Bush?

No, I don't think that is the reason.
/images/graemlins/grin.gif

[adios]

[ QUOTE ]
[ QUOTE ]
Respectfully, it seems that you're relying on politicians to do your thinking for you then. Your expectation is for politicians to work towards a solution to a problem that you don't have many ideas on solving.


[/ QUOTE ]

I don't understand your point. Isn't this what they're supposed to do? Sure, we all have ideas, but I would like to think our elected officials are working on ideas to improve OUR way of life.

[/ QUOTE ]

That's not how I view it. Politicians get my vote because I believe they will best represent what I want from government and in the best way I believe government should function.

[ QUOTE ]
I also rely on doctors to come up with solutions when I have a health problem. That's what they get paid for. If we are responsible for the ideas, what are politicians responsible for?

[/ QUOTE ]

Their responsible for representing their constituencies interests. I view politicians in a completely different way than you do. Very insightful and I appreciate your response.


[ QUOTE ]
[ QUOTE ]
Just give the government more money and the problem is solved is how I read this. Don't agree at all. Also I think that your proposals if enacted wouldn't have much of an effect on the distribution of income.

[/ QUOTE ]

To make this clear from the onset, I don't know that my ideas would work, but my idea is certainly not to give the goverment more money.

[/ QUOTE ]

Reading your response to my query that's what you stated. You want to raise government revenues by increasing FICA revenues, increasing the tax rates for upper income wage earners, and decreasing the number of allowable deductions.

[ QUOTE ]
It's to give them the same amount of money, but from different sources. If FICA taxes were paid on all levels of income, wouldn't the government be able to lower the percentage of income that is taken?

[/ QUOTE ]

I think the evidence clearly shows that the money would be spent on more government programs.

[ QUOTE ]
If 5 people had the following salaries: $30K, $50K, $100K, $500K, and $1 million, and were paying 15% on the first $90K of income, you get $52,500. If they each paid 5% on all income you get $84,000. The $30K and $50K, who probably need the extra money the most, save $3000 and $5000, and you have extra money to "fix the social security problem." Why should a multi-millionair pay the same to FICA as someone who earns $90K a year? If you taxed all income, you could probably lower the rate and get more money.

[/ QUOTE ]

This is a little confusing. First of all Social Security benefits are capped and thus someone who contributes twice as much as someone who barely made enough to receive the maximum benefits is paying twice as much to receive the same benefits. Second of all, all income is taxed per allowable dedcutions etc. but I think you're referring to FICA specifically. Since the government currently uses the surplus from Social Security to pay for other government programs and the government is currently running a defecit I don't see a lowering of rates happening. Is this the problem you wanted the politicians to solve? I thought you wanted politicians to solve the problem of people living in poverty and having more people accumulate wealth.

[Dead]

Hey adios, did you check out that screenshot above buddy?

Thanks,
Dead

[James Boston]

I think the general tone of your response shows that you believe that if the cap were lifted, the government would just take advantage of the extra money and nothing else. You're probably right. Still, the idea I presented involves removing the cap, AND lowering the percentage of income paid in. Removing the cap and still subjecting the lower-middle class to the same rate is pointless.

[Hoi Polloi]

And when Bill Gates walks into a bar the average net worth of everyone in the bar is well over a billion dollars. But you can't spend your average net worth.

[natedogg]

[ QUOTE ]
I responded in more detail in another post. Please explain to me, if you have the numbers available, how taxing all income at a lower rate wouldn't help.

[/ QUOTE ]

Social Security is currently running a surplus.

Any increase to that surplus will do nothing whatsoever to alleviate the coming shortfall to the Social Security budget.

natedogg