Trump to create Sovereign Wealth Fund
- Thread starter Klaus 7196
- Start date
Thank God. It is literally the only way we could have a league to compete with the premier league la liga etc
I’m as fiscally conservative as they come.
And I favor this. In fact, I’d say that it’s long overdue. A SWF is not “a massive new government program” at all.
FWIW, a bipartisan group of Senators have already been working on the framework of a prospective SWF for the past few years. So Trump didn’t pull this out of nowhere.
The only problem with creating a sovereign wealth fund is that we should have done it 100 years ago.
I agree.
That some people see this as a “massive new government program” baffles me. That’s…not what a SWF is.
I am interested to see how they propose funding it, though. They don’t exactly have extra money laying around.
Yeah that's my first and only thought. These are usually created by countries that have huge surpluses. Which is the last thing we are.
Hence my desire for time travel. Seems a little late to be getting in this game, especially with how far in the red we are already running.
Could’ve at least done it in 2005 when they were looking at reforming Social Security. Would’ve had a number of years of SS surpluses to put into it.
What a missed opportunity that was.
I was actually thinking of mentioning that exact scenario, but then I thought, looking back at it, I'm not sure the political capital existed to overcome fears about putting SS money at some level of risk, no matter how low.
If people are comfortable putting their pensions at risk, why wouldn't they be comfortable with SS? I'm just curious about why people do or would distinguish between the two.
I'm less concerned about the deficit, as this, theoretically, could help with that. I'm more curious why this is a good time to start such an endeavor (assets near all-time highs). 2008/9 would have been a PERFECT time for that, though pragmatically, would have been nearly impossible given all of the other challenges.
I might argue that what fears there were about this risk were stoked in order to induce that trepidation -- from people who undoubtedly have all kinds of personal exposure to capital markets. Same goes for the argument of "they're wanting to privatize your Social Security to fill pockets on Wall Street!"
IMO, Sen. Moynihan gave the most honest answer (albeit privately to a fellow Democratic Senator) about why liberals were so averse to the prospect of making it easy for people who never had any investments to be able to get some and build a little wealth without digging any deeper into their pockets.
How could a fiscal conservative or anyone applaud a Sovereign Wealth Fund without knowing the details on how it will work?
That's an eminently fair question.
And, you're right, we need to learn more about it. I'll revise it to say that I'm in favor conceptually of having a Sovereign Wealth Fund. And it's because I'm in favor of stockpiling appreciating capital assets for those entities that can gain by doing so. And I think the federal government is one of them.
My first thought is that it can come from savings realized from trimming public expenditures. It's not like they're going to be returning those to us. They're in no position to be doing that. In fact, I'd say it's 90%+ likely that all of us here will face higher taxes for the rest of our lives than we have for the lives we've lived to this point.
Keep in mind that the idea of a SWF was first floated by the Senate working group on Social Security. I think the number of Senators who have taken part in them is up to around 6 or so. But it's been done quietly. The two primary ones have been Cassidy (R-LA) and King (I-ME). King is technically an independent. But he caucuses with Dems and reliably votes with them, too. Others have included Sens. Kaine and Romney.
Here's a story on them discussing a SWF to help repair Social Security.
Sens. Bill Cassidy, R-La., and Angus King, I-Maine, are drafting legislation to ensure the solvency of Social Security that might involve the creation of a sovereign wealth fund
Ya think?
But what about making mortgages more accessible and affordable to those who have bad credit?? Are you saying they shouldn't own a home, you heartless Blue Meanie.
Craze, is the Trump administration so confident DOGE will create a debt free surplus that we will need a SFW in order to obtain the best possible investment on our surplus?
Gotta love the optimism.
Having said that, the Social Security Fund surpluses which existed all those years may have benefited if it had its own SWF.
Only if they don't have calculators or don't know how to use one. Which is possible with some of those people, possibly including the main one.
No, DOGE won't come anywhere close to creating a surplus. If they're able to trim $200B a year, I will be very impressed. The vast majority of the money is in places they aren't touching.
Congress had other purposes for those excess funds.
And I think my wife learned what she knows about personal finance from them.
Congress at the time the Social Security legislation was passed had just lived through the stock market crash.
Consequently, the SS surplus was limited to low risk government securities.
The purpose thus was to avoid risk.
Well, they bought special issue Treasuries with it. They could’ve invested it in all kinds of low risk ways and generated higher returns than with those - thus putting off the Trust Fund depletion date.
So I don’t agree that they were motivated by risk aversion. I think they were motivated by having domestic dollars raised through taxes that could be used to finance the deficit - as opposed to selling them to foreign and private investors or to the Fed. As the Special Issue are non-marketable, they’re less costly to the government.
And I think they balked at adding the investment component for the reason Sen. Moynihan (who favored this) said. I was certainly in no position to have refuted him.
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