On Thursday, presidential candidate Donald Trump proposed creating a sovereign wealth fund for the United States. “Why don’t we have a wealth fund?” he asked. “Other countries have wealth funds. We have nothing.” Trump offered that the fund would be financed by tariffs “and other intelligent things.” He further argued:

We will build extraordinary national development projects and everything from highways to airports to transportation infrastructure. We’ll be able to invest in state-of-the-art manufacturing hubs, advanced defense capabilities, cutting-edge medical research and help save billions of dollars in preventing disease in the first place.

Lo and behold, a day later the Biden Administration said it was planning the same thing:

Proponents of the idea believe the fund could be tapped to support emerging technologies where there are high barriers of entry — including shipbuilding, emerging geothermal and nuclear fusion projects, and quantum cryptography. Biden aides similarly think the fund could be used to create synthetic reserves of critical minerals by purchasing futures contracts.

Let’s consider these arguments, in turn:

1. “We need one because they have one.” This argument is highly popular with the under-6 crowd, but should be immediately disqualified by anyone else.
2. “Highways to airports to transportation infrastructure. …We’ll be able to invest in state-of-the-art manufacturing hubs, advanced defense capabilities, cutting-edge medical research. …shipbuilding, emerging geothermal and nuclear fusion projects, and quantum cryptography.” Right. We have just passed the bipartisan infrastructure bill. We have passed the CHIPS and Science Act. We have DARPA. We have the National Institutes of Health. I could go on. We have programs, passed by Congresses and signed by presidents, to address national priorities.
3. “Countering US adversaries’ grip on critical materials and emerging technology is a key motivator of the project.” Wait, that sounds familiar. Indeed, it was exactly the same fear of China that motivated the 2018 passage of the BUILD Act and the creation of the United States International Development Finance Corporation to counter China’s Belt and Road Initiative. Been there. Done that.

In short, there is already the ability to address every concern raised by the proposals. All a sovereign wealth fund would do is insulate the decision-making from the appropriate oversight of Congress and the normal policy process. These are proposals by arrogant politicians to control hundreds of billions of taxpayer dollars because they think they are smarter than anyone else and in making these proposals have proven they are not.

One more question: How would we acquire one such magical sovereign wealth fund? The only way would be to levy taxes, not spend the money, and build the fund. I don’t know if anyone has noticed, but the federal government does levy taxes, but not as much as it does spend money, and has only accumulated debt in the process.

Thinking about the mechanics reveals a deeper economic truth. The United States does have a sovereign wealth fund: its $28 trillion economy that provides the resources to fund all significant national priorities. Instead of adding destructive taxes and borrowing in the name of a sovereign wealth fund, Trump, Biden, and Harris would be better advised to actually propose policies that are good stewards of economic growth.