Redistribution of wealth

CNN Money has an article about "Foreclosures hitting a six year low" emphasizing  "And it's coming at a good time as home prices rebound. 'There is unprecedented demand from institutional investors willing to pay with cash to buy at the foreclosure auction, helping to raise the value of properties with a foreclosure filing in 2013 by an average of 10% nationwide,' said Blomquist."

The winners are (no surprise) again the banks and the investors. Those who were foreclosed upon are screwed. This would be  almost 500,000 people in 2013, and the over a million in each of 2012 and 2011. And I wonder how many of the million or so long time unemployed have lost their  remaining life savings in this way.

What you have is an instance of a huge transfer of wealth from the bottom to the top. The foreclosures will sell at 10% or more than the foreclosure price. The banks will unload this "bad debt". Speculators will buy them at the beginning of a recovering market, and do well as they rehab a bit and resell. The folks who lost their homes will continue to plod along, having lost their most valuable possession with little hope of ever owning again.

Our millionaire congress people will continue to be on break, careless of the plight of their people. They passed a trillion dollar budget as they ignored the plight of the over a million and growing long term unempolyed.  Extending unemployment costs 27 billion. The amount of fraud in the process is minuscule in comparison to the cost. Pumping  27 billion into the economy so that some folks in dire straits can invest in their families, education, and a  life does not seem like too much to ask of our government.

As an offset, if that's necessary, why not raise the capital gains taxes on the 400 or so highest taxpayers who in 2007 and 2008 took a record share of capital gains during the meltdown years of the Great Recession, according to Forbes magazine. ( http://www.forbes.com/sites/janetnovack/2011/05/11/richest-400-took-record-share-of-capital-gains-during-market-meltdown-year/)

Joseph Stiglitz, a Nobel winning economist out of Columbia University, estimates the loss in revenue to our national treasury at $30 billion over these two years when the tax rate on capital gains was first reduced to 15%. (The Price of Inequality by Joseph Stiglitz, p. 72) Talk about redistribution of wealth, social programs are among the first to be cut or mitigated by our congress. That redistribution is from the poor to the rich, rather than vice versa as some would have us believe.

It is easy to say but the rich have earned it, and the poor haven't. If society is to work for all, all should contribute as they can. This asks more of the rich, who in turn profit from a great economy, and opens the door for others to move up the social ladder. Some of us near the middle of the ladder will dismiss this by saying "I did it myself." But I say, hold on there. It was  a different time, and the climate that lets you say that now is completely different. There are problems that need more attention than shifting blame to those who have lost much, if not all in the redistribution of wealth.