Trump supporters tend to just endorse every idea he has, so I am sure there are Trump supporters who have little knowledge of what a sovereign wealth fund does and what the risk are who think it must be just dandy if Trump proposes it. Please do this thought experiment: Understand what a sovereign wealth fund is and then ask yourself if you would have wanted the US to have such a program if Joe Biden or Hilary Clinton were president. If the answer is no, then you should not want it under a Trump presidency. One day Democrats will be back in office.
A sovereign wealth fund is a license to steal, increases government influence over the economy and will increase the deficit which we should be attempting to reduce.
In addition to just generally being a terrible idea, what Trump envisions doing with it is dangerous. He has said it could be used to buy Tic Tok. I do not want the US government owning a social media platform. I don't even like the government funding for PBS and NPR. At a time when newspapers are shutting down and major news outlets are cautious about crossing Trump, do we really want a government owned outlet that shapes public opinion, and that people rely on for a source of information? I know I don't.
The Wall Street Jornal published an editorial today in which they explain how a sovereign wealth fund operates and why they oppose the creation of one for the United States. I am posting excerpts below. I would like to post the full piece but try to be mindful of fair use regulations. Please follow the link to read it all.
Now here’s an idea: Leverage federal assets to create a new investment fund for the political class to invest in whatever it pleases, including private companies. What could possibly go wrong?
The answer is plenty, which is why President Trump’s proposal Monday to create a new sovereign wealth fund deserves to die in Congress.
... Why has no President done this before? One reason is the U.S. perennially runs budget deficits, projected at $1.9 trillion for this fiscal year. Countries with sovereign wealth funds typically invest surplus revenue from commodity sales or excess foreign exchange reserves from trade surpluses, e.g., China.
... Such funds typically enrich a country’s rulers and their friends far more than citizens. Foreign leaders use the funds to finance businesses and projects of political allies. Corruption is a constant temptation. Malaysia’s version, 1MDB, channeled billions of dollars to support the lifestyles of a Prime Minister and his cronies.
There’s also no need for such a U.S. fund since .... The biggest danger is that such a fund will be used to invest in private companies. Politicians would love a separate vehicle to direct capital without having to go through Congress. Mr. Trump gave the game away on Monday when he suggested such a fund could buy TikTok.
... with ownership comes political control. A sovereign wealth fund would give Mr. Trump and future Presidents more leverage to bully businesses. ... Government doesn’t create wealth, and a sovereign wealth fund would merely be one more way for the government to commandeer private wealth for political purposes. It will destroy more wealth than it creates.
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