The US is creating a national sovereign wealth fund. There have been several states that have made wealth funds. Alaska has a $64 billion fund.
The U.S. sovereign wealth fund could approach or exceed $2 trillion. The largest sovereign wealth funds is $1.7 trillion. At the time of the executive order’s signing, no specific initial size or target amount was officially announced. The fund’s establishment is in its early stages, and details such as the source of funding and exact size are subjects of ongoing planning by the U.S. Treasury and Commerce departments, with a goal to have it operational within the next 12 months.
The Norway Sovereign Wealth Fund, officially known as the Government Pension Fund Global (Statens pensjonsfond Utland), invests mainly in stocks but also in bonds and real estate. They invest globally with the aim of achieving the highest possible return within the bounds of acceptable risk.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.
” Where do the (medical/health sector, energy, mining/resources, defense, mobility, communication, agriculture) winners (mainly) invest/spend money? ”
Winners vs losers money is allocated to each slice of the spending pie according to differing ratios.
It might be seen that the winners could have become winners for different reasons, by birth, by different moral assemblies, and different biases.
Losers are losers for different reasons; as above
Winners with capital to spend/invest have an advantage over those without.
They have opinions that are not just heard, but listened to.
They have concerns that are not just acknowledged, they are addressed.
So, losers keep losing, and winners are fine with a diverse, riled, ignorant breeding pool.
In fact, maintaining, expanding, and managing the losers is a project the winners are more than happy to invest in.
It’s people, not colors.
The red party and the blue party are just the two opposing faces of a pliers jaws, crushing the people — the losers, between them.
Once in a while, the process squeezes out something beyond suffering.
Something wonderful.
Something enduring.
Something like the French Revolution, Democracy, the Constitution of the United States, the Bill of Rights.
Manuals, instructions, for how some of the people can be sent to the other end of the pliers, to grip the levers, and relieve that pressure.
Till the new hands-on-levers start feeling “special”, superior.
Til they start to see themselves as winners.
Only need a few to start taking bribes, seek personal opportunities, and the pressure is back on, in contradiction to why they were sent there.
So, they spend their money on what they have access to.
On an ice cold Mountain Dew, or shares in YUM! .
[ Yes, to some extent, within liberal (from mind, not exaggerated economical ‘efficiency/optimization’ burdening social coherence) groups. Some (maybe_even_many) choose being part of humanism and ‘Age of Enlightenment/Reason’, AI_deepSeek fits into that, for a 21. century cultural development.
But what are the money streams (facts), who analyzes these, like done for technical processes with, e.g. flow diagrams? ]
It is for war, I think
It’s up to the banks to decide who with assets to secure loan, how much, what interest rate to loan money to based on Fractional Reserve Lending. So perhaps the Fed will have the final say UNLESS new treasury bonds are issued to secure the loans?
The Coalition for a National Infrastructure Bank has been lobbying for years to recreate what has already been done several times in US History, using private bank loans for national infrastructure. They have numerous proposals for HSR, water pipelines, roads, internet, …
Political interference is a concern. Politicians HATE having piles of money left idle and would seek to either spend it or guide it toward friends and allies. (see social security trust fund)
https://www.wsj.com/politics/policy/treasury-department-says-doge-access-is-read-only-2563712d?st=JWBJiW. Given access like this is scary.
DeepSeek V3 is doubtful. ChatGPT very similar.
The idea of the U.S. establishing a sovereign wealth fund (SWF) while carrying a large national debt is an intriguing one, and it can make sense under certain conditions. Here’s a breakdown of the potential rationale, challenges, and considerations:
### **Potential Rationale**
1. **Earning Higher Returns**: If the U.S. could invest in a diversified portfolio of assets (e.g., equities, real estate, infrastructure, or private equity) through an SWF and achieve returns higher than the interest rate it pays on its debt, it could theoretically improve its fiscal position. For example, if the U.S. pays an average of 2-3% on its debt but earns 5-7% on SWF investments, the net gain could help reduce the debt burden over time.
2. **Long-Term Fiscal Sustainability**: An SWF could be used to save and invest surplus revenues (if any) during periods of economic growth or high resource revenues (e.g., from oil, gas, or other natural resources). This could help stabilize the budget and provide a buffer for future economic downturns or demographic challenges like an aging population.
3. **Global Economic Influence**: An SWF could enhance the U.S.’s influence in global markets by acquiring strategic assets abroad or supporting domestic industries. This could align with broader economic or geopolitical goals.
4. **Intergenerational Equity**: An SWF could be designed to address intergenerational equity by saving and investing for future generations, particularly if the U.S. expects future fiscal pressures (e.g., from climate change, healthcare costs, or pension liabilities).
### **Challenges and Considerations**
1. **Debt Financing Costs**: The U.S. would need to ensure that the returns on the SWF’s investments consistently exceed the cost of borrowing. Given the size of the U.S. national debt ($33 trillion as of 2023), even a small mismatch between investment returns and borrowing costs could lead to significant losses.
2. **Initial Funding**: Establishing an SWF would require upfront capital. Given the U.S.’s current fiscal deficits, it would likely need to borrow more to fund the SWF, which could exacerbate the debt situation in the short term.
3. **Political and Economic Risks**: SWFs are subject to market risks, and poor investment decisions could lead to losses. Additionally, political interference in investment decisions could undermine the fund’s performance and credibility.
4. **Opportunity Cost**: The funds used to establish an SWF could alternatively be used to pay down existing debt, invest in infrastructure, or address other pressing domestic needs. The opportunity cost of not using the funds for these purposes would need to be weighed against the potential benefits of an SWF.
5. **Global Precedents**: Most countries with SWFs (e.g., Norway, Saudi Arabia, Singapore) have established them using surplus revenues from natural resources or trade surpluses. The U.S., however, runs persistent budget and trade deficits, which makes the case for an SWF less straightforward.
### **Historical Context**
The U.S. does not currently have a federal-level SWF, though some states (e.g., Alaska, Texas) have their own funds, often funded by resource revenues. At the federal level, the U.S. has focused more on debt management and monetary policy to address fiscal challenges.
### **Conclusion**
While the idea of a U.S. sovereign wealth fund is not inherently nonsensical, it would require careful consideration of the trade-offs involved. The U.S. would need to ensure that the SWF’s returns consistently exceed its borrowing costs, avoid exacerbating its debt situation, and address potential political and economic risks. In the absence of surplus revenues or a clear source of funding, the case for an SWF is weaker, and alternative strategies like debt reduction or targeted investments might be more prudent.
The way I see it, debt and savings are not mutually exclusive. The core issue is the national profit and loss on government spending. This is a cashflow issue.
Australia paid off its national debt in the 2000s. It was lauded for a while but there were, amongst other issues, no government bonds for investors. The investment and other industries raised their concerns. Some debt was re-levied. Subsequent governments have increased debt beyond reasonable levels, but that’s another story.
There is going to be a lot of tariff funds coming in as revenue. What should the government do with it? Spend it all away? Better to sequester it and use the yield to pay down debt. The yield is ‘eternal’, and the fund can keep growing, thus the yield. This is using positive cashflow to offset negative cashflow, reduce the burden on the national accounts, accelerating the pay down of debt whilst maintaining the nest egg. This is good.
The Sovereign Wealth Fund is a positive step, but it is a small part of the solution.
It is not bad idea. Banks will lend to the state and the state will be pumping money into economy, stimulating it.
Yeah, but the state will be pumping money into the economy where IT, not the market, thinks it ought to be pumped. Not generally a good thing.
It works well for Norwegian welfare found. It was most likely Musks idea or at least he gave it a go. Hard to mess it up more since Us is already messed up.
I mean if the profit from sovereign wealth fund is better than the interest for borrowing money,… then it is profitable.
So they borrow at lower interest and earn more with sovereign wealth fund than the difference.
A sovereign wealth fund is someplace a government stashes its surpluses for a rainy day.
The federal government, of course, has no surpluses to stash, it is consistently running deficits of $1-2T. We are literally borrowing to pay the interest on our current debt!
So I really don’t see where the money is going to come from. Any money put in the fund would just add to the deficit!
Secondly, the current best investment vehicle for the federal government would be reducing the deficit, as it would avert considerable carrying costs and risk of a monetary crisis. Or it would be, if our government were currently capable of not spending every cent it can beg, steal, or borrow.
Really, I do NOT see how this is supposed to work. It makes no sense at all.
Kinda concerned the national forests will be transferred over.
Oil and mining leases would be paid into such a fund, so, opening up federal lands to the highest bidders — the ones with capital, means more into the SWF.
In other words, selling national assets to billionaires.
I’d rather see funds come from the profits made on research results.
Feds fund fusion plants, profits go into the SWF.
Feds funded medical research produces a new medicine, profits go into the SWF.
That’s a way to grow the fund and improve people’s lives.
Should Social Security funds be used?
That would be a way to grow that fund as well.
[ “Feds fund fusion plants, profits go into the SWF.”
If it scales towards a maybe 25 000 times 1GW fusion plants, ‘we’ on Earth will get into additional overheating difficulties(?)
Global warming is currently ~230-460TW to oceans, land&ice absorb 23-46TW and atmosphere’s heat uptake is about 2.5-5TW. Human’s primary energy consumption relates to an average power of ~18TW.
Increasing heat radiation or reducing Sun’s heat transfer insolation, then (give Starlink a call)? ]
Well, when you’re running approaching a $2T deficit each year, and the national debt is already over $36T, maybe selling off assets to people who would actually put them to use IS a good idea.
The question I keep returning to is, what’s to stop the government from doing that, and just spending the extra money, like they have with prior windfalls?
Really, in the end, there’s no clever fix until we can get deficit spending under control.
[ if nature strikes back, another deficit (besides one from capitalistic shifting/redistribution, because workers cannot provide enough revenue for serving others (educated within taking advantage of a system’s possibilities) rates on fortune?), will be added from re-insurers maybe not even being able for to provide sufficient compensation with natural disasters from reserves or following realistic/reasonable insurance fees?
If private fortune (including production, research, essential life support) is lost by disasters, no government can provide compensation without income (maybe providing backup into a future by bonds/warranties/shares on things being expected, but what’s not there is missing in a situation).
Biggest losses of wealth happen through war and natural disasters.
This with diminishing returns for fossil fuels (being one massive stored amount of fortune for to extract from ancient _ in some way unearned, in a modernistic sense _ resources). If there’s an extensive impact of environmental disasters, that splits society to ones starting over again and again, because of being set to unprivileged locations and no sufficient solidarity within a nation for balancing income and fortune and risks, for providing possibilities, not a big chance from a wealth fund, spent on interests of ‘the rich and resting established’ (then the only) solvent influencers to a political class, for restoring spread income and social equality on a healthy level (with a ‘power to the strong’ concepts)?
If environmental disasters hit very specialized, essential and very expensive parts of production, without being supported from a spread base of people, this will get a bottleneck for (a) societies development, even more if compensation from other parts of the world, that time still functional, are on hold, because of political will.
Humanity was lucky til these days and ongoing, most time within recent history, considering massive external from space or globally intense catastrophes.
Who, if not the ‘big nations’ could be a suitable role model for multilateral compensation within a possibly increasing number of disaster events?
International law has to be renewed and improved.
“The total private wealth in the U.S. is estimated to be around $140–150 trillion.”
“Wealth in the U.S. is highly concentrated:
The top 1% of households own about 30–35% of total private wealth.
The top 10% own about 70–75% of total private wealth.
The bottom 50% own only about 2–3% of total private wealth.”
“Real Estate $40–45 trillion
Corporate Equity $40–50 trillion
Private business equity $10–15 trillion
(Retirement Accounts $35–40 trillion
Cash and Deposits $15–20 trillion) ” (thx) ]
so the government could have a one time wealth tax on the top 1% of 70 percent collect 35 trillion in assets and place it into a sovereign wealth fund. the fund’s profits and sales of assets back into the private market over a period of 10-30 years could completely pay off the current national debt. sounds good to me lets do it. the 99 percent would not have to pay a cent. top 1% would still have $15 trillion they would be fine.
alternatively, the fed ‘prints’ $35-50 trillion and lends to the Treasury or simply the Treasury creates a $35-50 trillion dollar coin and deposits at the fed. then the money is used to buy up global assets before the inflation kicks in. same a QE since 2008 and during pandemic. then the same thing pay down the debt over a period of years using the funds profits and asset sales. other countrys don’t like it well sanctions and US navy & air force block imports and exports for your country. we can do this now but if we wait 15-30 years the Chinese Navy will be able to challenge ours and the dollar as reserve currency goes away. take advantage while we can.
[ being a thought experiment, anyway, because top level fortune (and their advisory structures) can live on their own philosophy of governmental structures and redistribute that fortune by decision (not always, not fast maybe, not completely, not always without short stagnation of growth, etc.) and given ‘they’ have the right to, like everyone ‘they’ also should get time for to adjust to new rules and have a comprehensive concept given for the tax’ purpose (given, ‘they’ don’t need much time for restructuring to ‘their’ advantage, again, and that ‘they’ recollect the money (mostly) from lower/middle income groups, then again(?):
“Their investments generate an average annual return of 7–10%, with 15–25% of their wealth held in liquid assets that allow for flexible investment changes.”
lower/middle income groups options:
low risk:
“Investment Type Average Annual Return (2023) Notes
Savings Accounts 0.5% – 4.0% High-yield savings accounts offer ~4% APY, while traditional banks pay <0.5%.
Certificates of Deposit (CDs) 1.0% – 5.0% Longer terms (e.g., 5-year CDs) yield higher rates.
Money Market Accounts 1.5% – 4.5% Combines savings and checking features with slightly higher interest.
Treasury Bonds (T-Bills, T-Notes) 1.5% – 5.0% U.S. government bonds are ultra-safe; 10-year Treasuries yield ~4.3% (2023).
Corporate Bonds (Investment-Grade) 3.0% – 6.0% Low-risk corporate bonds offer steady income but require larger upfront investments."
moderate risk:
"Investment Type Average Annual Return Notes
Dividend-Paying Stocks 2% – 6% (dividends) + capital gains Blue-chip stocks (e.g., Coca-Cola, Johnson & Johnson) offer stability.
Index Funds (S&P 500) 7% – 10% (historical average) Passive investing via ETFs (e.g., VOO, SPY) mirrors market performance.
Real Estate Crowdfunding 5% – 12% Platforms like Fundrise allow smaller investments in real estate.
Balanced Mutual Funds 4% – 8% Mix of stocks and bonds for moderate growth and reduced volatility."
high risk:
"Less common for low-income groups due to volatility and capital requirements.
about: -50 to 100%"
there are difficulties:
Gini coefficient
"U.S.: ~0.48 (high inequality)."
Poverty rates
"U.S.: ~11% of the population lives below the poverty line (~$13,590 for an individual).
Global: ~9% of the world lives on less than $2.15/day (extreme poverty)."
"Global Comparison
Developed Countries: Low-risk returns are similar (e.g., EU savings accounts yield ~1–3%).
Emerging Markets: Higher interest rates (e.g., India’s fixed deposits pay ~6–7%), but currency risk and inflation offset gains."
and btw a 'psychological analysis' of U.S. governments on very compressed/limited wording:
"Administration Leadership Style Psychological Traits Political Culture
Nixon (1969–1974) Authoritarian, Secretive Paranoia, Resentment Distrust, Realpolitik
Ford (1974–1977) Restorative, Pragmatic Pragmatism, Healing Post-Watergate healing
Carter (1977–1981) Idealistic, Moral Idealism, Frustration Economic stagnation, Crisis of confidence
Reagan (1981–1989) Charismatic, Ideological Optimism, Simplicity Economic growth, Nationalism
Bush Sr. (1989–1993) Pragmatic, Experienced Caution, Realism Post-Cold War optimism
Clinton (1993–2001) Charismatic, Adaptive Resilience, Pragmatism Economic optimism, Bipartisanship
Bush Jr. (2001–2009) Decisive, Ideological Authoritarianism, Overconfidence Fear, Nationalism
Obama (2009–2017) Intellectual, Visionary Idealism, Pragmatism Polarization, Hope
Trump (2017–2021) Authoritarian, Populist Narcissism, Impulsivity Populism, Distrust
Biden (2021–2023) Empathetic, Pragmatic Restoration, Cautiousness Polarization, Stability" (thx) ]
Are you a cat walking on a keyboard?
I ask, because I do read your comments.
[ for comparison:
“Summary of Total Costs
War Total Cost (Including Future Obligations, adjusted for inflation)
World War II $5–7 trillion
Vietnam War $1.2–1.8 trillion
Iraq War $3–4.5 trillion
Ukraine War $1.5–2.7 trillion
Peloponnesian War $10–20 billion
Mongol Conquests $50–100 billion
Thirty Years’ War $100–200 billion
Napoleonic Wars $200–300 billion
American Civil War $150–250 billion
World War I $400–600 billion”
“Wars have caused trillions of dollars in damages to real goods, materialized values, properties, cultivated grounds, agricultural revenue, and biological/geological resources. The costs include both direct destruction and long-term economic impacts, such as reconstruction, healthcare, and environmental cleanup. While ancient wars had relatively lower costs in absolute terms, modern wars (e.g., World War II, Iraq War, Ukraine War) have resulted in astronomical losses, with future obligations adding significantly to the total burden.”
natural disaster events and climate change, e.g.
“Tohoku Earthquake and Tsunami (2011): Caused $360 billion in damages, including:
Destruction of infrastructure, homes, and farmland.
Loss of fisheries and aquaculture due to the Fukushima nuclear disaster.”
“Annual Global Impact: Natural disasters cause an estimated $150–200 billion in damages annually, with agriculture and real estate being the most affected sectors.”
“Rising Sea Levels: Threaten $1 trillion worth of coastal real estate in the U.S. alone by 2100.”
“Droughts and Crop Failures: Reduce global agricultural output by 10–25%, leading to annual losses of $50–100 billion.”
“Melting Permafrost: Destabilizes infrastructure in Arctic regions, with potential damages exceeding $100 billion by 2050.” ]
The other option to the highest bidder taking US natural resources, is continued ownership by the public, for their use in perpetuity.
The forests of thousand year old trees cut down for railroad ties have long since rotted away.
The forests left are still earning their keep as hosts to millions of visitors from all around the world.
Long term value for millions vs short term gain for a few.
That aside, the Social Security fund would be fat right now, had previous concepts for investing the fund been implemented, rather than the feds “borrowing” from it in exchange for promises to repay.
Moving SS funds into a SWF would make it liquid real quick.
Use it to buy the patents for medications the gov spend the most on, then shop around for manufactures.
Invest in growing replacement kidneys, and save the ~$30,000,000,000 the gov spends every year on the “free” federal dialysis program.
Not something all the dialysis corporations sucking up those billions would like.
I’m sure you’re familiar with the ghost heart research. Build-a-Heart when you need one.
There’re researchers that have already grown functional thyroid organelles.
Replacement tissues to save on decades of medications and therapy would save lives and money.
Not things purely capitalistic companies would fund.
But of the greatest long term value to the American people.
Invest in US/us.
[ “Not things purely capitalistic companies would fund.”
Me not having difficulties with ‘capitalism’ organizing money for being a mean for simplifying exchange on markets. A governments duty is within limiting interest rates getting a burden/’overwhelmingly depressive’ to economics and the base of a society and to limit (extensive, expansive) speculative financial markets only existent for their own sake(?)
For the companies (within their philosophies) it’s their offerings for people to choose from (governments duty is organizing a trustful, visible and transparent communication towards customers for reliable market situations), but ‘we’ can ask, how/where the money earned by these companies is, then, distributed into (main) sectors in a country’s or remote countries economies/financial structures?
Where do the (medical/health sector, energy, mining/resources, defense, mobility, communication, agriculture) winners (mainly) invest/spend money? (thx) ]
[ “assets to people who would actually put them to use”
“deficit spending”
What are examples You would put to each category? (thx) ]