Nominal growth continues and will continue to support asset prices over time.
To the extent there is not a sufficient desire to spend income, the government has the options to either cut taxes to increase private spending and/or increase government spending with a bid for those idle resources.
Government deficits are slowly rising worldwide, as these ‘automatic stabilizers’ function to reduce slack and restore growth.
However, the widening income distribution also serves to move the output toward goods and services for those with spending power.
And none of the candidates seem to be directly addressing this fundamental issue.
World’s richest got even richer last year
by Joseph A. Giannone
NEW YORK (Reuters) The old saying holds true: The rich do get richer.
Even as world financial markets broke down last year, personal wealth around the world grew 5 percent to $109.5 trillion, according to a global wealth report released on Thursday by Boston Consulting Group.
It was the sixth consecutive year of expanding wealth. The fastest growth was among households in developing regions, such as China and the Gulf States and among families who were already rich.
That wealth also is increasingly concentrated among the richest.
The top 1 percent of all households owned 35 percent of the world’s wealth last year. Meanwhile, the top 0.001 percent, ultra-rich households holding at least $5 million in assets, commanded $21 trillion — a fifth of the world’s wealth.
The planet also continues to mint new millionaires rapidly. The biggest jumps in 2007 came from emerging countries in Asia and Latin America. Overall, the number of millionaire households grew 11 percent to 10.7 million last year.
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