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The text of Benedict XVI itself disproves your speculation that he's calling for a one-world government...."[the principle of subsidiary] holds that nothing should be done by a larger and more complex organization which can be done as well by a smaller and simpler organization. In other words, any activity which can be performed by a more decentralized entity should be. This principle is a bulwark of limited government and personal freedom. It conflicts with the passion for centralization and bureaucracy characteristic of the Welfare State."

Thanks for that info, Pyro. A couple of comments on the encyclical excerpt:

First, it's worth pointing out that this encyclical is self-consciously intending to "pay tribute and to honour the memory of the great Pope Paul VI, revisiting his teachings on integral human development", specifically naming the Encyclical Populorum Progressio as the foundation BXVI intends to build on with this work. In the section on the U.N. the "subsidiary" quote comes from BXVI himself, but the majority (but not all) of the "one-world-government" sounding quotes are taken Pope John XXIII's encyclical Pacem in Terris. Benedict himself says that this "family of nations" would

...need to be regulated by law, to observe consistently the principles of subsidiarity and solidarity, to seek to establish the common good, and to make a commitment to securing authentic integral human development inspired by the values of charity in truth.

A U.N. "regulated by law" would mean either a U.N. self-regulated by charter, or regulated by an outside entity, perhaps by it's member nations. The latter seems to be what BXVI has in mind, when he goes on to say (emphasis mine)

....it would have to have the authority to ensure compliance with its decisions from all parties, and also with the coordinated measures adopted in various international forums. Without this, despite the great progress accomplished in various sectors, international law would risk being conditioned by the balance of power among the strongest nations.

The U.N. would be subservient to it's member nations, but none of those nations will have a greater say than any others, enforcing a sort of economic and moral equivalence among them:

....of giving poorer nations an effective voice in shared decision-making.

None of that changes how the recommendation starts, namely with BXVI's call for a "United Nations with teeth" that has the authority to redistribute wealth, to manage the global economy, to disarm nations, and to protect the environment....and the power to back it up [emphasis mine]:

....such an authority would need to be universally recognized and to be vested with the effective power to ensure security for all, regard for justice, and respect for rights. Obviously it would have to have the authority to ensure compliance with its decisions from all parties, and also with the coordinated measures adopted in various international forums.

has the authority to redistribute wealth

I don't think Benedict is a socialist though, since he says the following in the encyclical as well (as well as the Church's consistent condemnation of socialism):

41. In the context of this discussion, it is helpful to observe that business enterprise involves a wide range of values, becoming wider all the time. The continuing hegemony of the binary model of market-plus-State has accustomed us to think only in terms of the private business leader of a capitalistic bent on the one hand, and the State director on the other....

42. ...The processes of globalization, suitably understood and directed, open up the unprecedented possibility of large-scale redistribution of wealth on a world-wide scale; if badly directed, however, they can lead to an increase in poverty and inequality, and could even trigger a global crisis. It is necessary to correct the malfunctions, some of them serious, that cause new divisions between peoples and within peoples, and also to ensure that the redistribution of wealth does not come about through the redistribution or increase of poverty: a real danger if the present situation were to be badly managed.

57. ...A particular manifestation of charity and a guiding criterion for fraternal cooperation between believers and non-believers is undoubtedly the principle of subsidiarity, an expression of inalienable human freedom. Subsidiarity is first and foremost a form of assistance to the human person via the autonomy of intermediate bodies. Such assistance is offered when individuals or groups are unable to accomplish something on their own, and it is always designed to achieve their emancipation, because it fosters freedom and participation through assumption of responsibility. Subsidiarity respects personal dignity by recognizing in the person a subject who is always capable of giving something to others. By considering reciprocity as the heart of what it is to be a human being, subsidiarity is the most effective antidote against any form of all-encompassing welfare state. It is able to take account both of the manifold articulation of plans — and therefore of the plurality of subjects — as well as the coordination of those plans. Hence the principle of subsidiarity is particularly well-suited to managing globalization and directing it towards authentic human development. In order not to produce a dangerous universal power of a tyrannical nature, the governance of globalization must be marked by subsidiarity, articulated into several layers and involving different levels that can work together. Globalization certainly requires authority, insofar as it poses the problem of a global common good that needs to be pursued. This authority, however, must be organized in a subsidiary and stratified way, if it is not to infringe upon freedom and if it is to yield effective results in practice.