Mr. President, the job you have is unenviable, but raising taxes on the wealthy, by essentially letting the Bush tax cuts expire, at this moment in history is like a body blow to the beleaguered upper 10% of the income ladder, who will just go further on a buying strike, if it keeps piling up. They've already been decimated - final figures may show they lost as much as 34%, ON AVERAGE, of their wealth in 2008 and 2009. All the claims about 'but we'd just go back to the Clinton-era rates, under which we saw prosperity' are erroneous, as we didn't see such massive wealth destruction when Clinton was in office. Apples and Oranges, Mr. President; Apples and Oranges. http://www.nytimes.com/2009/03/13/business/economy/13wealth.html Household Wealth Falls by Trillions By VIKAS BAJAJ Published: March 12, 2009 In the last few months, most Americans have felt poorer. Now they have the numbers to prove it. The Federal Reserve reported Thursday that households lost $5.1 trillion, or 9 percent, of their wealth in the last three months of 2008, the most ever in a single quarter in the 57-year history of recordkeeping by the central bank. The net worth of Warren E. Buffett, left, fell by $25 billion last year. For the full year, household wealth dropped $11.1 trillion, or about 18 percent. Though the numbers do not yet reflect it, the decline in the stock market so far this year has probably erased trillions more in the countryâs collective net worth. The next biggest annual decline in wealth came in 2002, when household net worth fell 3 percent after the collapse of the technology bubble. The most recent loss of wealth is staggering and will probably put further pressure on the economy because many people will have to spend less and save more. The fortune of Bill Gates fell by $18 billion, but he regained the top spot on the Forbes list of richest people. Most of the wealth was lost in financial assets like stocks, which tumbled at the end of last year. The Standard & Poorâs 500-stock index, for instance, fell 23 percent in the fourth quarter. The value of residential real estate, the biggest asset for most families, fell much less â $870 billion, or about 4 percent. Even the richest among us have become a lot poorer. This week, Forbes magazine published its list of the richest people in the world. At No. 1, Bill Gates, the founder of Microsoft, still had $40 billion to his name, but that was down $18 billion. The wealth of Warren E. Buffett, the investor whose company Berkshire Hathaway had a rare bad year, tumbled $25 billion, to $37 billion. The loss of wealth is concentrated among the most affluent Americans, in large part because they own more stocks and bonds than the rest of the country. Only about 50 percent of households own stock, and many of them own relatively small sums in retirement accounts. As a result of their greater wealth and higher incomes, the affluent tend to spend a lot more than their share of the population would imply. The top 20 percent of income earners spend more than the bottom 60 percent of income earners, according to calculations by Tobias Levkovich, the chief United States equity strategist at Citigroup. âWhen their wealth is mauled, they are not particularly interested in spending,â Mr. Levkovich said. The Fed report released on Thursday also showed that total borrowing and lending increased at an annual rate of 6.3 percent in the fourth quarter, mostly as a result of increased borrowing by the federal government to finance its operations and various bailouts of the financial system. The governmentâs borrowing increased at an annual rate of 37 percent. But borrowing by households dropped 2 percent. Lending to businesses was up 1.7 percent. Recent surveys of loan officers by the Fed have shown that companies have been drawing down lines of credit that were established in the past, and that only a small fraction of the lending to the private sector is through new loans, which are much harder to obtain than in recent years.