The rich get richer while ordinary people lose their homes

   

FORBES REPORTED: “AFTER 13 YEARS ON THE TOP, BILL GATES IS NO LONGER THE RICHEST MAN IN THE WORLD. THAT HONOR NOW BELONGS TO HIS FRIEND AND SOMETIMES BRIDGE PARTNER WARREN BUFFETT.” BUFFETT IS NOW WORTH $62 BILLION AND GATES IS WORTH $58 BILLION (PHOTO: NATI HARNIK FOR AP)

  Why is it that the ranks of the ultrawealthy is increasing while ordinary Americans are losing their homes to foreclosesure at a record rate?

     The Aug. 27, 2008 issue of The Wall Street Journal illustrates this point.  At p. D2 there is an article titled “The Ranks of the Ultrawealthy Grow.”  At p. A2 there is an article titled “Glimmer of Hope in Home Prices.” 

     The article on the ultrawealthy stated: “About 47,000 people had a net worth of $20 million or more in 2004, the latest available year, according to new estimates by the Internal Revenue Service.  While that was up only slightly from 46,000 in  2001, it was up 62% from 29,000 in 1998.”

     The article about the “larger upper crust” included these figures:

     Net worth of $2 million to less than $3.5 million — 846,000 persons with a total of $2.169 trillion.

     Net worth of $3.5 million to less than $5 million — 247,000 persons with a total of $1.024 trillion.

     Net worth of $5 million to less than $10 million — 231,000 persons with a total of $1.563 trillion.

     Net worth of $10 million to $20 million — 79,000 persons with a total of $1.085 trillion.

     Net worth of $20 million or more — 47,000 persons with a total of $2.591 trillion.

     The article stated that IRS data made available earlier this year disclosed that “the nation’s top 400 taxpayers by income reported total income of $85.6 billion on their federal income-tax returns for 2005 — an average of nearly $124 million apiece.”  (Emphasis added.)

     The article on home prices stated that during June 2008 the prices of homes in 10 major metropolitan areas fell 17 percent from June 2007.  It added that there was a 10.1 month supply of houses for sale at “the current sales pace” and that “the number of unsold homes remains at historically high levels.”  [NOTE — a six-month supply of unsold homes is normal for “healthy housing markets.” 

     “Economists caution that home sales and prices may have worsened in recent weeks as mortgage conditions have tightened, lending rates have risen and concerns about the solvency of Fannie Mae and Freddie Mac have intensified,” the article on home sales said.

     “Sales of previously-owned homes make up about 85% of the market and have been  hampered by a flood of foreclosed properties that’s expected to continue through next year,” the article stated.  (Emphasis added.)

     While presidential candidate Sen. John McCain has no plan on how to assist Americans from losing their homes, he continues to maintain that President George Bush’s tax cuts for upper income Americans should remain in force.

Photo Credits:mbmatt356 at Flickr (Cleveland home) and **Mary**’s photostream at Flickr (Calfornia mansion)

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Tags: Economy, foreclosures, tax cuts, ultrawealthy