The Indicator from Planet Money How would a US sovereign wealth fund even work?
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Feb 6, 2025 The podcast dives into the concept of a U.S. sovereign wealth fund sparked by a recent executive order. It explores the historical context and significance of such funds, citing the example of the Texas Permanent School Fund. The discussion highlights major hurdles, like political interference and legal issues, that could complicate establishing a national fund. Economists share diverse opinions on investment strategies and the necessary independence for effective management. It's an insightful look at a controversial and largely debated economic idea.
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Sovereign Wealth Fund Purpose
- A sovereign wealth fund invests excess government money for higher returns.
- This ideally results in greater national wealth and lower taxes for citizens.
History of Sovereign Wealth Funds
- Sovereign wealth funds gained popularity in the late 90s but originated in the 1800s in the U.S.
- Today, the U.S. has around 15 state-level sovereign wealth funds, including the Texas Permanent School Fund.
US Deficit Challenge
- The U.S. hasn't had a budget surplus since 2001, accumulating substantial debt.
- This makes a national sovereign wealth fund seem absurd, according to Tyler Cowen.