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View Diary: Bill Halter comes out swinging - SLAMS (!!) Lincoln for bailout vote (193 comments)

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  •  No, it evaporated (0+ / 0-)

    The wealthy lost money (in net worth) too.  That's how investment markets work.  We don't ask "where did the money come from?" when our retirement/stock/bond portfolios go up.  (You don't think that going up is a redistribution from the wealthy to the poor, do you?)  But all of a sudden, when it goes down, we want to know "where did all the money go?"  Things are traded based on their perceived value, which is determined by the supply and demand (of a specific stock/bond/real estate/other investment item), which vary over time.  So yes, wealth can evaporate without it going to anyone else.

    There's plenty of redistribution going on toward the top.  But not every stock market crash falls into that category, and neither does TARP.  Bush's tax cuts were a redistribution to the top.  The idiotic thing in our tax code that says your investment income ("capital gains") should be taxed less than your earned income is redistributing income to the top.  When insider trading goes on, that's redistributed to the top.  But when something is redistributed, it is accounted for.  And sometimes value (and therefore money) does evaporate.

    •  What you say is (0+ / 0-)

      physically impossible.

      •  It is economically possible, I explained how (0+ / 0-)

        and happens all the time, and no one questions how it happens when things are on the uptick.  We don't have a fixed... pie, if you will.  The pie grows most of the time, but it shrinks too.  It's not as though there's a fixed pot of money for everyone, and all that matters is how it's distributed.  No.  The pot itself grows and shrinks.

        Saying it's "physically impossible" is not an argument, nor does it make you right.

        •  Really, nothing disappears (0+ / 0-)

          It's out there somewhere.

          You honestly believe that it magically went poof?

          •  Only insofar as that money (0+ / 0-)

            "magically" appeared in your stock portfolio without you having to put any extra money in while the market was expanding, or insofar as the value of your house "magically" grew during the housing boom without you having to do anything to it, sure.

            •  Unrealized gain is unrealized (0+ / 0-)

              The change in the appraised value of my house truly was an illusion. On the other hand, the missing money is somewhere because it actually existed. We know it was real because TARP was necessary to refill the till.

              •  Oh you bet your house value existed (1+ / 0-)
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                Your house value did exist, believe it or not.  If you sold it then, you would have gotten that much for it.  So it was no illusion.  So yeah, it existed.  Just like you lost your house value in the bust, banks lost the values of their investments.  You could sell your house after the bust, but you'd be upside down and you'd have to make up the rest of the money somewhere.  Same way with banks, they could sell their bad investments, but they'd be upside down and must make up the money elsewhere.  Ergo, TARP, until the values come back up.

                Money is not actually a physical thing.  Its only 'value' is as a means for exchange.  The value of the dollar itself fluctuates for that reason.  We decide "wealth" by collectively deciding the value of things you own.  The monetary value.  That monetary value fluctuates, like it or not.  It doesn't mean you own any less of a... thing... I suppose.  You still own your house.  You still own your stock portfolio.  It's just that they are worth half what they were a couple of years ago.  Hence, you lost wealth, and the wealth did go, in your terms, "poof."

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