For 30 years UK households were in deficit for only 3 quarters, until late 2016 when they fell into continuous deficit (10 quarters and counting). What is going on? @L__Macfarlane @RichardJMurphy @AnnPettifor https://t.co/80TmgNQ72t … pic.twitter.com/SC75udB0SA
— Charles S Adams 🇪🇺 📷🖋📡 (@etotheipiequals) 8 August 2019
OK, about which the Senior Lecturer tells us that:
I would suggest that the answer is simple: it is growing inequality that is creating this situation, plus a structural change in the way that wealth is held.
Now let me be clear, households is all households so in principle this should not be the case, since the ranking should be indifferent to wealth. But if the wealthy hold more of their assets through companies and pension funds invest ever more widely outside the UK, whilst the links between asset owners and their assets becomes ever harder to trace because of nominee holdings, then the likelihood that there will have been a shift of apparent asset holding out of the so-called household sector and into other categories is high. The result is that the net insolvency of a great many UK households becomes much more apparent.
The sectoral balances are the flows between the different parts of the economy. It’s the net change in any one period.
Insolvency is of course the stock position, not the flow. With household wealth (yes, net of liabilities) at whatever it is, £9 trillion or summat, we don’t have evidence that the British household sector is net insolvent.
Stocks and flows matey….