Economists say the rising stock market is giving an added boost to consumer spending through what is known as the "wealth effect."

Key Points

  • The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter.
  • All of the gains came from stock holdings thanks to an end-of-year rally.
  • Economists say the rising stock market is giving an added boost to consumer spending through what is known as the “wealth effect.”

The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter, as an end-of-year stock rally lifted their portfolios, according to new data from the Federal Reserve.

The total net worth of the top 1%, defined by the Fed as those with wealth over $11 million, increased by $2 trillion in the fourth quarter. All of the gains came from their stock holdings. The value of corporate equities and mutual fund shares held by the top 1% surged to $19.7 trillion from $17.65 trillion the previous quarter.

While their real estate values went up slightly, the value of their privately held businesses declined, essentially canceling out all other gains outside of stocks.

  • gAlienLifeform@lemmy.world
    642·
    9 months ago

    We just shouldn’t allow individuals to have over a billion dollars, just 100% tax on anything over a billion when combined assets exceed that number. Both because there’s no good reason for any one person to have that much money and because as pathetic as American campaign finance laws are it’s a legit national security risk for someone to have that kind of money to throw at their pet causes.

    • Flying Squid@lemmy.world
      42·
      9 months ago

      I would lower that to $100 million. I don’t think there’s even a good reason for anyone to be that rich, but if we’re going for a crazy upper limit…

    • BrianTheeBiscuiteer@lemmy.world
      23·
      9 months ago

      If you had a billion dollars and never earned a penny more, you would actually find it hard to spend it all before you die. It could probably fully support several generations of your family. I’m totally fine with saying, “Congratulations! You maxed out the money counter in the game of Life!”

    • Etterra@lemmy.world
      25·
      9 months ago

      Make it a million, with an M. Adjusted for inflation after inception, and including stock income. I’ve been saying it for years. Good luck convincing those in power who it would actually effect to enact it though.

      • force@lemmy.world
        4·
        9 months ago

        It is possible to become a millionaire without exploiting others in the same way the 1% do. I would find a limit somewhere in the tens of millions more reasonable