According to Forbes, Microsoft Chairman, Bill Gates is the second-wealthiest man in the world and Warren Buffett, the Berkshire Hathaway chairman, is the third-wealthiest man in the world. Recently, Buffett and Gates asked the wealthiest billionaires in America to donate half of their fortunes to philanthropic causes either during their life or upon death. Forbes estimates the fortunes of America's 400 richest people at $1.2 trillion. This means that if the proposal of Gates and Buffett is accepted, America's billionaires would donate $600 billion dollars. (For more, see Millionaires Who Gave It All Away.)

Let's take a look at a few of the things that could be paid for by the country's wealthiest people.

IN PICTURES: World's Greatest Investors

BP Oil Spill
The disaster in the Gulf could easily be paid for with the fortunes of America's richest people. Analysts estimate that the BP oil spill has a projected cost of anywhere from $17 billion to $60 billion dollars. The highest liability projection I've seen is $75 billion dollars. Of that estimate, $20 billion would be used to compensate claimants by way of a government fund. The other $55 billion is estimated to pay for Gulf clean up and damage claims. At 12.5% of half their wealth, $75 billion is just a drop in the bucket compared to the combined fortunes of the wealthy.

Paying Down the National Debt
The United States national debt is now over $13 trillion dollars. While $600 billion dollars cannot eliminate the national debt, it is enough to make a dent in it. A $600 billion dollar payment would cover the share of over 14 million U.S. families. It would also buy our economy roughly five months (at the current rate) without a national debt increase. That would be a big help since our national debt is increasing by $4.1 billion dollars a day. (Learn more about national debt, read Government Debt: From Billions To Trillions.)

Bank Bailouts
Remember those incredibly unpopular bank bailouts in September 2008 known as the Troubled Asset Relief Program (TARP)? The TARP was a $700 billion dollar taxpayer funded bailout for the biggest banks in the country. Instead of taxpayers footing the bill for these bailouts, they could have been covered almost entirely by half of the net worth of the country's richest people. If the TARP was funded by America's billionaires, the federal government would have only had to raise $100 billion dollars instead of issuing billions in new government debt. (Learn more in Bailout Acronyms 101.)

Economic Stimulus
Half of the wealth of America's elite could have been used to jumpstart the U.S. economy from one of the worst recessions in a nation's history. Remember the economic stimulus bill passed in 2009? The spending portion of the entire American Recovery and Reinvestment Act could have been paid for with the philanthropic donations of America's billionaires. The entire bill totaled $787 billion dollars, of which $275 billion dollars was set aside for tax cuts. That's over $500 billion dollars applied to spending. The country's superrich could have footed the entire stimulus bill and still had billions left over!

Poverty
Could the wealth of America's billionaires permanently end world hunger? No, but it could eliminate world hunger until 2030. According to the United Nations, it only costs $30 billion dollars a year to eliminate world hunger. That much money could feed over 862 million impoverished individuals a year worldwide. The charitable philanthropy of billionaires could end world hunger for the next 20 years.

The Bottom Line
As you can clearly see, the wealth of America's richest people could finance many of the economic and social problems of the country. However, it would decrease the net worth of some very prominent people and turn some billionaires into mere multimillionaires. If they want to convince the ultra-rich to drop their social status to just rich, Buffett and Gates have a whole lot more talking to do. (For even more reasons to give, see Give To Charity; Slash Your Tax Payment.)

Catch up on the latest financial news; read Water Cooler Finance: More Spilled Oil, Fewer Jobs.

Related Articles
  1. Investing Basics

    Warren Buffett Biography

    Warren Buffett is probably one of the top investors in the world.
  2. Investing News

    How 'Honesty' Could Pay off for Jessica Alba

    Is it possible that Jessica Alba is one of the savviest businesswomen on the planet?
  3. Stock Analysis

    How GM Keeps on Truckin'

    Following a giant bailout and a giant IPO, the new GM is carried by sales of its giant trucks. But is it profitable?
  4. Investing News

    Famous Celebrities Who Love Investing

    Celebrities have a bit of a bad reputation these days. These five celebrities, though, have used their fame and their money to invest successfully instead of spending it on looking good.
  5. Entrepreneurship

    Bill Gates Success Story: Net Worth, Education & Top Quotes

    Learn about billionaire Bill Gates, and how the computer genius forged his own path from an early life and eventually changed the world with his innovation.
  6. Entrepreneurship

    Donald Trump Success Story: Net Worth, Education & Top Quotes

    Discover more about Donald Trump the man. Learn about his history and back story, path to success and current political aspirations.
  7. Professionals

    Wealthy Clients are Thirsty for Better Advice

    New research uncovers the ultra-weathy's fast-growing demand for better, in-depth investment advice.
  8. Stock Analysis

    Warren Buffett's Latest Bet: The Riskiest Yet?

    Warren Buffett just made the biggest — and possibly riskiest — acquisition of his career.
  9. Professionals

    The Top 5 Richest Restaurateurs

    The top five richest restaurateurs have proven that it is possible to not only turn a profit in the restaurant business but to become multi-millionaires!
  10. Professionals

    The Top Six Richest Supermodels

    Through excellent investing, brand management and high earnings, these six supermodels have cultivated multi-million dollar net worths.
RELATED TERMS
  1. Hunting Elephants

    The practice of targeting large companies or customers.
  2. Directors And Officers Liability ...

    Directors and officers liability insurance covers you if you're ...
  3. Warren Buffett

    Known as "the Oracle of Omaha", Buffett is Chairman of Berkshire ...
  4. Steve Cohen

    A trading magnate also referred to as the Hedge Fund King and ...
  5. David Tepper

    A legendary investor who specializes in distressed debt and manages ...
  6. David Einhorn

    Known for his short selling strategy, activist investor David ...
RELATED FAQS
  1. What are the major laws (acts) regulating financial institutions that were created ...

    Presidents George W. Bush and Barack Obama, in conjunction with Congress, signed into law several major legislative responses ... Read Full Answer >>
  2. Why did Warren Buffett invest heavily in Coca-Cola (KO) in the late 1980s?

    Warren Buffett found Coca-Cola an attractive investment because it had a moat and was attractively valued. Buffett began ... Read Full Answer >>
  3. Why does Warren Buffett largely avoid investing in the technology sector?

    Warren Buffett has often said that he avoids investing in the technology sector because he does not like to own stocks in ... Read Full Answer >>
  4. Why doesn't Warren Buffett own Apple (AAPL) stock?

    Warren Buffet claims he simply does not know how to properly evaluate Apple (AAPL) and does not feel confident in his reading ... Read Full Answer >>
  5. What governments have used the human development index (HDI) to set policy?

    The Human Development Index (HDI) is a United Nations measurement tool to compare human prosperity between countries. Most ... Read Full Answer >>
  6. What are the key metrics of the human development index (HDI)?

    The key metrics of the standard U.N. Human Development Index (HDI) are health, education and income. These metrics were chosen ... Read Full Answer >>

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!