No. of Recommendations: 30
So don't they ever have to pay off these loans? Don't the lenders ever collect? And if they do, where to the billionaires get the funds to pay?
Sure. To super-simplify, I am a tech billionaire. I go to the bank and get a $20m loan, using, say $30m in my stock as collateral.
I spend the $20m during the year, buying yachts, artwork, whatever. At the end of the year I owe the bank $1m in interest. I roll over the loan, using the same $30m in collateral, and ask for another $21m in loan collateralized by another tranche of $32m in stock. I pay the $1m interest out of the new loan, and at the end of the year I will owe them another $1m for the second year’s loan. The amounts increase, but barely compared to what I have to play with.
Jeff Bezos has $200 billion in stock, (that’s 1,000 20-millions) so he can keep doing this forfuckingever, never actually selling a single share of stock before he dies. And when that happens, his heirs pay off the loans, which are probably in the neighborhood of (30 years x $20m/yr) $600 m, plus accumulated interest, say $40 m, and then drown themselves in the appreciated stock certificates which are still worth over $200 billion or probably much more.
The loans get paid off. No taxes have ever been paid. The heirs are wealthy beyond imagnation. Bezos has lived off “loans” his entire life. And you and I have paid for the roads, schools, Pentagon, Social Security, and all the rest that taxes are needed for.
