Arithmetically, higher government saving and a bigger external deficit imply a further fall in private net saving.
To explore how the expansion might eventually end, the authors consider a range of possibilities for private net saving.
All signs suggest that private equity net asset values rose for an eighth consecutive quarter between January and March.
FORBES: The Great Private Equity Comeback Is Complete--At Least On Paper
Since net stock of private savings is larger than the net stock of public sector liabilities, Koll reckons that the overall effect on the economy would be positive.
America has experienced an almost identical deterioration in its private-sector net savings in recent years.
By definition, the sum of private and government net saving is equal to the external deficit.
Private Client Services net earnings declined 6%, while Corporate and Institutional Client Group plummeted 49%.
Social Welfare Spending is displayed along the horizontal axis and Net Private Investment on the vertical axis.
FORBES: Memo To The President: We Can't Tax, Spend And Print Our Way To Prosperity
The lowest level to which net private investment fell in any previous post-war recession was 4.3% of personal income in 1991.
FORBES: Memo To The President: We Can't Tax, Spend And Print Our Way To Prosperity
The relationship between social welfare spending and net private domestic investment since the end of World War II tells a troublesome tale.
FORBES: Memo To The President: We Can't Tax, Spend And Print Our Way To Prosperity
Meanwhile, net private investment has fallen by almost a third, from averaging more than 10% of personal income to just over 7%.
FORBES: Memo To The President: We Can't Tax, Spend And Print Our Way To Prosperity
It is new investment, net private investment over and above that required to maintain the current stock of capital that drives the economy forward.
FORBES: Memo To The President: We Can't Tax, Spend And Print Our Way To Prosperity
Over the four decades to 1996, net private saving was consistently positive ie, the saving by American households was more than adequate to meet the financial needs of business.
Southeast Asia is home to 600 million people and has a growing middle class, while Singapore has the highest concentration of millionaire households in the world and a burgeoning pool of private high-net-worth investors.
WSJ: U.K. Banks Sell $245 Million Dim Sum Bonds in Singapore
To understand why, one needs to focus on an accounting relationship: by definition, the sum of net private-sector saving (saving less investment) and public-sector saving (the budget balance) must be equal to a country's current-account balance.
Since the beginning of the Great Recession of 2007, net private investment collapsed to 4.5% of personal income in 2008 and to virtually nothing (0.4%) in 2009, recovering to a mere 2.3% in 2010 where it remains today.
FORBES: Memo To The President: We Can't Tax, Spend And Print Our Way To Prosperity
The best-fit estimate represented by the downward-slopping line in the chart reveals that for each one percentage point of personal income that social welfare spending rises above 10%, net private investment falls by about 1.2 percentage points of personal income.
FORBES: Memo To The President: We Can't Tax, Spend And Print Our Way To Prosperity
Between 1949 and 1974, annual net private investment averaged 10.3% of personal income, and although social welfare spending was constantly rising during this period, the above chart suggests it does not appear to have had any appreciable detrimental effects on new investment.
FORBES: Memo To The President: We Can't Tax, Spend And Print Our Way To Prosperity
Julius Baer runs a private bank for high net worth individuals and an asset management business, which apart from Julius Baer Americas includes alternative investment provider GAM.
Research funded by the Kauffman Foundation shows that between 1980 and 2005 all net new private-sector jobs in America were created by companies less than five years old.
Government surpluses help the economy grow: In fact, surpluses represent a net drain on private-sector income.
The Institute of International Finance, a bankers' group, expects a 30% decline in net flows of private capital from last year.
There is no government program that turns destitute people into prosperous people, only programs that provide a safety net while the private economy at large is failing.
Bruce Walker, head of Centrica Storage (which runs Rough), worries that a government-run reserve would be seen by the private sector as a safety net, reducing its incentive to build commercial storage.
There is currently no incentive or safety net to allow for private consumption in the economy.
FORBES: What The SEC, And The PCAOB, Still Don't Admit About Chinese Frauds
From 2001 to 2008, New Jersey lost a net 25, 000 private-sector jobs even as public employment grew by 65, 000 workers.
Since the current-account balance equals the net saving of the private and public sectors, a budget deficit boosts the external deficit.
Economics 101 students also learn that the three sources of net saving are: private saving, saving from abroad, and government dissaving.
FORBES: Obama's Witch Doctor Economists Propose Reducing the Federal Deficit By Spending More
Treating income as the only number that matters reinforces one of our worst bad habits in private and public life: ignoring net worth.
FORBES: In Our Fear-Based Economy, Fiscal Cliff Talks Obsess Over Income, Ignore Net Worth
According to advisory firm Triago, the net asset values of private equity portfolios on average dropped between 3% and 5% in the three months following June 30.
FORBES: Private Equity Surprise: Portfolios Are Holding Up Fine
应用推荐