A US Sovereign Wealth Fund Would Be Industrial Policy Mission Creep

Introduction

The United States has never had a sovereign wealth fund (SWF), but the recent calls for one have raised concerns about mission creep. Mission creep is the tendency for a government program or agency to expand its scope beyond its original mandate.

In the case of a SWF, this could mean using the fund to finance projects that are not in the best interests of the American people. For example, the fund could be used to bail out failing businesses or to subsidize industries that are not competitive. This would be a misuse of taxpayer money and would undermine the free market.

What is a Sovereign Wealth Fund?

A SWF is a government-owned investment fund that is typically used to manage the country's surplus revenue from natural resources, such as oil or gas. SWFs can also be used to invest in other assets, such as stocks, bonds, and real estate.

SWFs are common in many countries around the world, but they are relatively rare in the United States. The only SWF in the United States is the Alaska Permanent Fund, which was created in 1976 to manage the state's oil revenue.

Concerns about Mission Creep

There are a number of concerns about the potential for mission creep if the United States were to create a SWF. One concern is that the fund could be used to finance projects that are not in the best interests of the American people.

Another concern is that the fund could be used to bail out failing businesses or to subsidize industries that are not competitive. This would be a misuse of taxpayer money and would undermine the free market.

Finally, there is the concern that the fund could be used to finance political projects or to reward political allies. This would be a violation of the public trust and would undermine the integrity of the government.

Conclusion

The United States should not create a SWF because of the potential for mission creep. A SWF could be used to finance projects that are not in the best interests of the American people, to bail out failing businesses or to subsidize industries that are not competitive, and to finance political projects or to reward political allies.

These are all serious concerns that should be taken into account before creating a SWF. The United States should focus on other ways to invest its surplus revenue, such as reducing the deficit or investing in infrastructure.