If the S&P 500 dropped 20%, that's about a year's growth. Long-term investors who bought before that would be poorer than they thought they were, but they're not worse off than they started and there wouldn't be any particular bill to pay. If they're a long term investor then they can wait for it to come back. (A similar argument could be made for larger drops.)

The real suffering comes from whatever effect there is on the rest of the economy due to a recession, more layoffs, etc.

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Qhemlomo 4 hours ago | parent [-]

They can sit it out but that doesn't mean no one paid the bill.

And some others might need to pull out when its down.

Money doesn't appear out of thin air.

Why would it lead to recession if a handful of big companies lose money they have?

It will show that the USA is in a recession for sure, but otherwise

	▲	skybrian 2 hours ago \| parent \| next [-]
		No, asset values are not like energy. There's no conservation rule. When stocks get bid up, market valuation goes up far more than the amount of money that changed hands. Most of the market cap appears "out of thin air." It's just what people think it's worth. And when the stock goes down again, it goes back where it came from. The investors who bought stock at too high a price lose some of the money they put in, but there are others who never paid that price.
	▲	somewhereoutth 3 hours ago \| parent \| prev [-]
		> Money doesn't appear out of thin air. In fact [fiat] money does appear out of thin air (well, created by banks when they originate loans) - and has to to support a growing economy. Unfortunately, for various reasons, rather too much has been appearing, and has been funneled to the already wealthy.