Early this week, President Trump signed an executive order that instructs the Treasury and Commerce Departments to begin the process of establishing a sovereign wealth fund (SWF) in the United States.
I think they were just impressed with the infrastructure and business environment of Norway, Saudi Arabia, and Singapore, and said, let’s do that ourselves! Heck, that’s what Marcos Jr. in the Philippines did two years ago
It's funny really. We used to call this "Nationalisation".
Of course it would provide a very useful vehicle for the private sector to cash out the lame duck operations nobody else will take off their hands. It's one way to bail out pension fund managers who paid silly multiples at IPO.
As I understand it in order to create money the budget has to be passed by the Federal Government, presumably Trump wants the SWF to spend on projects that would not pass Federal Government scrutiny and therefore not be funded.
A really common argument I hear against MMT principles is that the US can afford to run high deficits because it's the reserve currency. It is the main argument that people on the left In the UK make against understanding MMT or using it's principles to make policy. I don't understand why this would make any difference but what logic are they using and why is it wrong?
I suspect this is a giant publicity stunt. They'll presumably argue that the American people are investing in their future. Perhaps they'll use the fund to provide a payment to all citizens in an attempt to distract from the fact that their real wages haven't grown for decades, and all the profit is going to the billionaires now running the US.
I agree that a SWF is laughable given our deficit. But let’s give the man some credit for trying. I think he’s really trying to do a good job and if we have all kinds of money to send abroad, perhaps we can funnel some of that to a SWF
Hi Lil Dois, I’ve never replied to a comment before but yours stumped me a bit 😅Stephanie is saying that there’s no need for an SWF at all because the US can already spend the money they want to put in the SWF. If you’re a real person, could you help me and explain what the need for an SWF is?
You make a fair point. Seeing as the US can print all the dollars they want, a SWF does seem a bit silly. On the other hand, China can print yuan and it has multiple SWFs. I don’t think a US SWF is real in the sense that it will actually be invested. I assumed a national SWF is a concept to instill some sort of national pride?
Thanks for the thoughtful and honest response! I’m not an expert on SWFs either, but the fact that the communist Chinese government has multiple SWFs indicates to me that an SWF might be a tool of authoritarian governments and not for the benefit of the people. For example, it seems that China has used its SWF to “pick favorites” and invest in companies that align with the government’s values, which negatively impacts free market competition. My concern is that Elon Musk and Donald Trump would use an SWF in a similar way, to avoid oversight and congressional approval to invest in companies that align with their personal values and their economic interests. For example, it’s easy to imagine them investing the new SWF in companies that Elon Musk owns. Given that and the contents of this article, it seems like there’s almost no upside to an SWF for us as citizens, but a huge potential downside if the government chooses to abuse it.
It would simply be ab easier way to avoid oversight -banking regulations, Congress, etc - and is ripe for corruption. It's not just a useless idea, it's an awful one. It's another Trump/Maga grift
Most SWF are funded by part ownership of private businesses by the government. This is ripe for corruption. Who does Uncle Sam invest in (winners, losers, cronies, politician's ventures, etc...)? Removes budgetary oversite from congress. Sidesteps the regulatory infrastructure of the banking industry and interest rates. Very Bad Idea.
>it wouldn’t give the federal government any spending power it doesn’t already have
Absolutely right, of course. A Common Wealth Fund (my preferred moniker for rhetorical/political reasons) would only have real, important value if it also paid a Common Wealth Dividend to all Americans — like the payments made every year in Sarah Palin's Socialist Utopia of Alaska, for instance.
A CWD could be a very powerful tool to stop or even (perish the thought!) reverse The Great Satan: insanely concentrated wealth (hence power).
And once implemented, a CWD would politically almost impossible to kill. Just like SS and Medicare, but engaging *every* American household — not just retirees.
Trump & Co., of course, won't be using any SWF for that. IMO they're most likely to use it as a way to direct Treasury deficit spending ("'money' printing") to purchases of crypto, allowing current crypto holders to "cash out" with real, bona fide US Dollars — money in the bank that they can actually use to buy houses, yachts, equity shares, politicians, whatever.
not sure what you are saying about SS here. SS is paid for entirely by the workers who will get the benefits. it works just like a savings account and insurance policy. if i have any objection to mmt it is that it disrupts the "paid-for" ethic (if you will) that gives SS its relative protection from the vultures in Congress. Medicare is not quite paid for by the workers who will get the benefits because Congress (the Left?) decided to make "the rich" pay for much of it. this makes it vulnerable to the rich who, understandably. don't like paying for something they can't see the value of to themselves. mmt would like to pay for it by simply printing money into existence, but it's hard for me to see how that draws forth the value that mmt claims (perhaps correctly in other cases) it does...or why the rich should give up printing that money for its own purposes rather than the beneficent purposes that mmt imagines.
The fact that SS is "paid-for" hasn't stopped the feds from ripping us off by raising the retirement age. It's up to us to vote out the 2 corrupt wings of the corporate duopoly, the Democrats and Republicans, and vote in people who want real change.
"ripping us off" is a dangerous attitude toward Social Security. The enemies of Social Security want you to feel ripped off. You will get what you paid for about three times over due to the effective iterest that arises automatically from pay as you go fianancing. But here is what happened: Before 1983 SS was "paid for by Congress raising the tax rate to keep up with the need for benefits. This was not working very well because it is hard to get Congress to raise taxes, and people like Reagan were running around tell you SS was a bad deal and was going to go broke and you were not going to get the benefits you paid for. With high inflation and a recession...meaning lower income and higher costs SS was indeed going to go broke if nothing was done. Reagan appointed a commission to study what to do. Amazingly the commission came back with a good fix: raise the tax to a level that would pay SS costs for the next fifty years while building a sizable Trust Fund that would help pay the coming costs of the large Boomer generation without imposing a high cost on the following generation that would not be large enough for the usual pay as you go tax rate. The commission knew that the tax would need to be raised again in order to pay for the longer life expectancis of the boomer generation and all following generations. The expected increase was small, but Congress preferred to not raise the tax and raise the retirement age instead. So for the last forty years you have been paying in less than what would pay for your normal benefits but that means not paying you enough for your needs when you got old. The fix they put in place was to raise the retirement age. I agree strongly this was a stupid idea, but it would have worked out if only we had raised the tax again starting in about the year 2020 at the latest...by a gradual amount of about one tenth of one percent per year. actually not needed every year. Today we are about to lose the possibility of increasing the tax gradually. In face if we do nothng SS will run out of the Trust Fund that is now helping pay for benefits without raising the tax. if we don't raise the tax one tenth of one percent per year starting this year, we could still make ends meet by raising it twotenths of one percent per year (but only for about ten years...but now every year.If we wait until 2033 or so we could still save SS by raising the tax 2 whole percent all at once. This would not be a real burden..not even noticed by most people, but it would be a psychological shock that would allow the bad guys to stampede the voters into letting them make changes in SS that would kill the program entirely..but take long enough so the people would not even realize it was happening. and then the bad guys would say "we told you so" implying that it was the fault of Social Security that it ran out of money and not the fault of those who fooled you into not raising the payroll tax in time.
Best not to think of it as a tax. it acts more like a savings account protected from inflation and other losses, and an insurance policy that saves you from really ugly poverty if you never make enough moey to save enough to pay for your retirement. But you have to be willing to pay the premium, save your own money through the payroll "tax." "making the rich pay" will turn ss into just another welfare program, and "the rich" know how to kill welfare. [and you would not like welfare, it costs way more than SS, and is humiliating, and you spend a lot of time at the welfare office proving you need it, and it never pays enough to actually live on.
It is not exactly "the Feds" ripping you off. it is the liars in Congress and the highly paid "non partisan experts" [expert liars] and a generation of journalists who never bother to find out the truth, but just report what the liars say without question or actual thought. From what I have seen recently, I would say it is also your fault, and fault of the "progressives" who want "the rich" to pay, and think they have the power to make them. and don't think there is anything wrong with living on welfare when you could have paid for it yourself and not have to worry about working until you are ready to die before you can retire. A I being clear? Pay for it yourself and You get todecide when to retire. "make the rich pay" and THEY will decide.
I used to believe something like what you do, that is BEFORE I read Stephanie Kelton's book. You are being clear . . . that you HAVEN'T read her book, which begs the question, what you are you doing in her substack? I can't help but suspect that you are here to troll. Those of us who have read her book and seen her ted talks are familiar with this 2005 quote from Alan Greenspan to Paul Ryan who wanted to move SS to private accounts: "There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody." This means that there is no need to collect taxes to fund SS, and there is no need to ask the rich to pay for it. It is not and cannot go broke unless congress DECIDES to let that happen. As for the rich, Stephanie Kelton has made it clear that WE DON'T NEED THEIR MONEY TO FUND ANYTHING THAT WE DECIDE WE WANT FUNDED. See Greenspan quote above. Of course we can tax the rich to reduce income and wealth inequality, but we don't need to tax them to get $ off them to pay for Mfa, the job guarantee, or anything else that we want to fund.
forgive me if i am a little rough on you:no animosity intended. but your oldie but goodie is right about some of the facts and dead wrong in the way it goes about understanding them. I used to say, when a started studying this about twenty years ago that the Trust Fund was not important..it could disappear today and it would not matter ...aslong as the payroll tax was raised to cover current costs. That is still true, but if the payroll tax is not increased..one tenth of one percentper year starting this year, or 2 full percent one time only starting by 2033, the Trust Fund will disappear leaving retirees with not enough to live on, making SS worthless as retirement insurance.
SS is not a savings account for the country. But it acts exactly like a savings account for the worker who pays his payroll tax just like puttingoney in the bank which he expects to draw out with interest when he needs it to pay for his needs when he can no longer work. Except SS has a better guarantee that any private savings or investment vehicle can provide, automatically safe from inflation, and providing an efective interest equal to the average growth in the economy..also automatic due to pay as you gof financing. this is not a transfer payment unless you regard the interest you earn on a private savings account as a transfer payment. the fact that the cash you get when you retire comes from the cash being saved on the same day by someone else saving for his own retirement does not mean that "the young" are paying for the old. This seems to be a hard concept forpeople to understand. Those retirees paid for their own retirement, and "the young" are paying for their own retirement. just like any bank or investment, or even chldren supporting their old parents ...which as a concept is harder for people to understand because "what have you done for me lately, mom?" is not something we usually think of saying.
I'll stop there, but you made a good enough start that i think you can understand this if you spend some time actually thinking about it. I am sorry that sounds like the snark that a lot of people say when someone on the web disagrees with them. but i don't mean it as snark. it takes real effort to rid oneself of all the cheap memes (lies) spread by the non partisan highly paid experts. if you want to risk a serious conversation i'll risk sending you my email.
A CWD is similar in justification to C. H. Douglas' universal dividend which was that it is the cultural heritage of every citizen for the accumulated technological innovation of the ast few centuries. UBI/universal dividend is monetary gifting and so aligns with my new monetary paradigm of Direct and Reciprocal Monetary Gifting. Its a very good policy but not quite a paradigm change like my 50% Discount/Rebate at retail sale and similar policy at point of loan signing. And yes paradigm changes are so beneficial, problem resolving and orthodoxy destroying that they are "an idea whose time has come" and hence irresistible.
MMT, a very good and valid palliative reform. However, wed to the strategically implemented policies of the new applied idea/paradigm of Monetary Gifting it could enable probably only the fourth mega-paradigm change in the history of the human species.
The Integration of The Opposites of Macro and Micro-economics with The New Monetary Paradigm
Macro-economics is about aggregates. Micro-economics is about separate economic agents individual and commercial. Macro-economics, while a legitimate study, basically abstracts the individual out, and micro-economics fails to address certain realities discoverable in economic aggregates.
My new macro-economic insight that 1) retail sale is the single aggregative as in universally participated in point in the entire economic process, and that it is thus 2) the most efficacious and beneficial point to implement monetary policy along with a new monetary paradigm of Gifting utilizing 3) the same means of money creation used by banks and governments to create money, namely equal debits and credits that sum to zero 4) enables us to integrate macro and micro-economics and resolve the stickiest problems of the current monetary paradigm like chronic erosive inflation, chronic individual monetary scarcity and increasingly rigid theoretical dualisms that do not and will not resolve.
Finally, it enlightens the fact that “free” market theoretics is 1) a fetish, 2) largely an unperceived misnomer for the actual reality which is chaotic and monopolistic financial domination via the current monetary paradigm for the creation and distribution of new money AKA Debt Only and 3) which enables periodic financial “innovation” to destabilze economies with the current paradigm and yet the perpatrators of such are bailed out while the victims of that chaos must “go scratch”.
Such beneficial integrations of conceptual opposites, temporal universe inversions of reality and problem resolutions are classical historical signatures of paradigm change.
Strategically integrating the policies of the new monetary paradigm of Direct and Reciprocal Monetary Gifting will implement actual individual economic freedom and economic free-flowingness.
Thank you non-Nobel prize committee for economics.
Without taking sides on whether it's a good or a bad thing, or indeed a necessary or an unnecessary thing, the following is the case
If a Sovereign Wealth Fund is used to buy domestic assets, it's nationalisation because the US federal government ends up owning or creating some US industry.
If an SWF is used to buy foreign assets, the effect is similar to that of an IMF loan, in that it supports the value of the US dollar as a reserve currency. It means that the country which.the investment took place in needs to sell exports to the US, directly or indirectly, in order to collect USD to pay dividends to the SWF. The only difference being that an IMF loan can in principle be repaid, whereas an SWF investment is, in principle, for ever.
i don't know why your comment is isolated by a click to read, but i imagine that what you are saying is probably true. but once you get rid of words that don't necessairly mean anything, what would having an swf do that not having one can't do? as far as i can see it would provide a way for the government ot earn money without taxing people who are trying to kill the governmnet because they think taxes are theft. it appears also to be true that there are risks the fund could cause great harm because it creats an unaccountable power which whether owned by "the government" or private enterprise ca nbe used to corruptly control the government by a cabal of the very rich. i am not here expressing any view for or against a swf, but i don't think you have said anything that helps anyone understand the issues "nationalization"? is that good or bad? how would it work? an IMF loan? how does that work out? i don't know and those words don't help me, though there meaningmay be obvious to someone who knows a lot more than I do. does an swf have to be a vehicle for international trade, or could it work like an investment bank for the same sort of investments the country makes now by deficit spenting or mmt-created money, but outside the tax=and=spend cycle...?
The truth of the tRUmp SWF is clear, while it is true "You’ve got a sovereign currency; you don’t need a sovereign wealth fund" the real point is stated earlier...
"a vehicle to warehouse conflicts of interest and corruption"
I suspect crypto will fit into this SWF scheme somewhere.
Frankly it's beyond baffing what little knowledge people have of the monetary system but to me just like DOGE, this SWF nonsense seems like another scam to line the pockets of the wealthy. Once again for the people in the back, the US government is self-funding, it issues the currency plain and simple.
Why would any country want to establish a sovereign wealth fund? If you have extra cash hanging around, spend it on your citizens and make their lives better!
I have no doubt it’s all about funneling USD into their own pockets.
Heaven forfend!
Correct.
Maybe a way of influencing interest rates outside of the Federal Reserve?
I think they were just impressed with the infrastructure and business environment of Norway, Saudi Arabia, and Singapore, and said, let’s do that ourselves! Heck, that’s what Marcos Jr. in the Philippines did two years ago
I do wonder, though, what Kelton thinks of the American Solidarity Fund proposal from Matt Bruenig a few years ago
It's funny really. We used to call this "Nationalisation".
Of course it would provide a very useful vehicle for the private sector to cash out the lame duck operations nobody else will take off their hands. It's one way to bail out pension fund managers who paid silly multiples at IPO.
As I understand it in order to create money the budget has to be passed by the Federal Government, presumably Trump wants the SWF to spend on projects that would not pass Federal Government scrutiny and therefore not be funded.
A really common argument I hear against MMT principles is that the US can afford to run high deficits because it's the reserve currency. It is the main argument that people on the left In the UK make against understanding MMT or using it's principles to make policy. I don't understand why this would make any difference but what logic are they using and why is it wrong?
A government which owns companies? That sounds a lot like communism.
Kind of, the employees in this situation wouldn't have a single say in the business processes or decisions & will actually lose rights
I suspect this is a giant publicity stunt. They'll presumably argue that the American people are investing in their future. Perhaps they'll use the fund to provide a payment to all citizens in an attempt to distract from the fact that their real wages haven't grown for decades, and all the profit is going to the billionaires now running the US.
I agree that a SWF is laughable given our deficit. But let’s give the man some credit for trying. I think he’s really trying to do a good job and if we have all kinds of money to send abroad, perhaps we can funnel some of that to a SWF
Hi Lil Dois, I’ve never replied to a comment before but yours stumped me a bit 😅Stephanie is saying that there’s no need for an SWF at all because the US can already spend the money they want to put in the SWF. If you’re a real person, could you help me and explain what the need for an SWF is?
You make a fair point. Seeing as the US can print all the dollars they want, a SWF does seem a bit silly. On the other hand, China can print yuan and it has multiple SWFs. I don’t think a US SWF is real in the sense that it will actually be invested. I assumed a national SWF is a concept to instill some sort of national pride?
I have no clue if this is a good idea or not.
Thanks for the thoughtful and honest response! I’m not an expert on SWFs either, but the fact that the communist Chinese government has multiple SWFs indicates to me that an SWF might be a tool of authoritarian governments and not for the benefit of the people. For example, it seems that China has used its SWF to “pick favorites” and invest in companies that align with the government’s values, which negatively impacts free market competition. My concern is that Elon Musk and Donald Trump would use an SWF in a similar way, to avoid oversight and congressional approval to invest in companies that align with their personal values and their economic interests. For example, it’s easy to imagine them investing the new SWF in companies that Elon Musk owns. Given that and the contents of this article, it seems like there’s almost no upside to an SWF for us as citizens, but a huge potential downside if the government chooses to abuse it.
It would simply be ab easier way to avoid oversight -banking regulations, Congress, etc - and is ripe for corruption. It's not just a useless idea, it's an awful one. It's another Trump/Maga grift
It's clearly a way to print money and use it to prop up the prices of assets owned by cronies.
Most SWF are funded by part ownership of private businesses by the government. This is ripe for corruption. Who does Uncle Sam invest in (winners, losers, cronies, politician's ventures, etc...)? Removes budgetary oversite from congress. Sidesteps the regulatory infrastructure of the banking industry and interest rates. Very Bad Idea.
>it wouldn’t give the federal government any spending power it doesn’t already have
Absolutely right, of course. A Common Wealth Fund (my preferred moniker for rhetorical/political reasons) would only have real, important value if it also paid a Common Wealth Dividend to all Americans — like the payments made every year in Sarah Palin's Socialist Utopia of Alaska, for instance.
A CWD could be a very powerful tool to stop or even (perish the thought!) reverse The Great Satan: insanely concentrated wealth (hence power).
And once implemented, a CWD would politically almost impossible to kill. Just like SS and Medicare, but engaging *every* American household — not just retirees.
Trump & Co., of course, won't be using any SWF for that. IMO they're most likely to use it as a way to direct Treasury deficit spending ("'money' printing") to purchases of crypto, allowing current crypto holders to "cash out" with real, bona fide US Dollars — money in the bank that they can actually use to buy houses, yachts, equity shares, politicians, whatever.
not sure what you are saying about SS here. SS is paid for entirely by the workers who will get the benefits. it works just like a savings account and insurance policy. if i have any objection to mmt it is that it disrupts the "paid-for" ethic (if you will) that gives SS its relative protection from the vultures in Congress. Medicare is not quite paid for by the workers who will get the benefits because Congress (the Left?) decided to make "the rich" pay for much of it. this makes it vulnerable to the rich who, understandably. don't like paying for something they can't see the value of to themselves. mmt would like to pay for it by simply printing money into existence, but it's hard for me to see how that draws forth the value that mmt claims (perhaps correctly in other cases) it does...or why the rich should give up printing that money for its own purposes rather than the beneficent purposes that mmt imagines.
The fact that SS is "paid-for" hasn't stopped the feds from ripping us off by raising the retirement age. It's up to us to vote out the 2 corrupt wings of the corporate duopoly, the Democrats and Republicans, and vote in people who want real change.
bud
"ripping us off" is a dangerous attitude toward Social Security. The enemies of Social Security want you to feel ripped off. You will get what you paid for about three times over due to the effective iterest that arises automatically from pay as you go fianancing. But here is what happened: Before 1983 SS was "paid for by Congress raising the tax rate to keep up with the need for benefits. This was not working very well because it is hard to get Congress to raise taxes, and people like Reagan were running around tell you SS was a bad deal and was going to go broke and you were not going to get the benefits you paid for. With high inflation and a recession...meaning lower income and higher costs SS was indeed going to go broke if nothing was done. Reagan appointed a commission to study what to do. Amazingly the commission came back with a good fix: raise the tax to a level that would pay SS costs for the next fifty years while building a sizable Trust Fund that would help pay the coming costs of the large Boomer generation without imposing a high cost on the following generation that would not be large enough for the usual pay as you go tax rate. The commission knew that the tax would need to be raised again in order to pay for the longer life expectancis of the boomer generation and all following generations. The expected increase was small, but Congress preferred to not raise the tax and raise the retirement age instead. So for the last forty years you have been paying in less than what would pay for your normal benefits but that means not paying you enough for your needs when you got old. The fix they put in place was to raise the retirement age. I agree strongly this was a stupid idea, but it would have worked out if only we had raised the tax again starting in about the year 2020 at the latest...by a gradual amount of about one tenth of one percent per year. actually not needed every year. Today we are about to lose the possibility of increasing the tax gradually. In face if we do nothng SS will run out of the Trust Fund that is now helping pay for benefits without raising the tax. if we don't raise the tax one tenth of one percent per year starting this year, we could still make ends meet by raising it twotenths of one percent per year (but only for about ten years...but now every year.If we wait until 2033 or so we could still save SS by raising the tax 2 whole percent all at once. This would not be a real burden..not even noticed by most people, but it would be a psychological shock that would allow the bad guys to stampede the voters into letting them make changes in SS that would kill the program entirely..but take long enough so the people would not even realize it was happening. and then the bad guys would say "we told you so" implying that it was the fault of Social Security that it ran out of money and not the fault of those who fooled you into not raising the payroll tax in time.
Best not to think of it as a tax. it acts more like a savings account protected from inflation and other losses, and an insurance policy that saves you from really ugly poverty if you never make enough moey to save enough to pay for your retirement. But you have to be willing to pay the premium, save your own money through the payroll "tax." "making the rich pay" will turn ss into just another welfare program, and "the rich" know how to kill welfare. [and you would not like welfare, it costs way more than SS, and is humiliating, and you spend a lot of time at the welfare office proving you need it, and it never pays enough to actually live on.
It is not exactly "the Feds" ripping you off. it is the liars in Congress and the highly paid "non partisan experts" [expert liars] and a generation of journalists who never bother to find out the truth, but just report what the liars say without question or actual thought. From what I have seen recently, I would say it is also your fault, and fault of the "progressives" who want "the rich" to pay, and think they have the power to make them. and don't think there is anything wrong with living on welfare when you could have paid for it yourself and not have to worry about working until you are ready to die before you can retire. A I being clear? Pay for it yourself and You get todecide when to retire. "make the rich pay" and THEY will decide.
I used to believe something like what you do, that is BEFORE I read Stephanie Kelton's book. You are being clear . . . that you HAVEN'T read her book, which begs the question, what you are you doing in her substack? I can't help but suspect that you are here to troll. Those of us who have read her book and seen her ted talks are familiar with this 2005 quote from Alan Greenspan to Paul Ryan who wanted to move SS to private accounts: "There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody." This means that there is no need to collect taxes to fund SS, and there is no need to ask the rich to pay for it. It is not and cannot go broke unless congress DECIDES to let that happen. As for the rich, Stephanie Kelton has made it clear that WE DON'T NEED THEIR MONEY TO FUND ANYTHING THAT WE DECIDE WE WANT FUNDED. See Greenspan quote above. Of course we can tax the rich to reduce income and wealth inequality, but we don't need to tax them to get $ off them to pay for Mfa, the job guarantee, or anything else that we want to fund.
FDR sold SS as a big savings account, thus the SS trust fund. Politically/rhetorically effective.
But that construct is arguably a rhetorical own-goal for liberals in these days of debt-ceiling chicken games. An oldie but goodie (?), from 2010: https://www.asymptosis.com/is-the-social-security-trust-fund-a-liberal-own-goal.html
Steve
forgive me if i am a little rough on you:no animosity intended. but your oldie but goodie is right about some of the facts and dead wrong in the way it goes about understanding them. I used to say, when a started studying this about twenty years ago that the Trust Fund was not important..it could disappear today and it would not matter ...aslong as the payroll tax was raised to cover current costs. That is still true, but if the payroll tax is not increased..one tenth of one percentper year starting this year, or 2 full percent one time only starting by 2033, the Trust Fund will disappear leaving retirees with not enough to live on, making SS worthless as retirement insurance.
SS is not a savings account for the country. But it acts exactly like a savings account for the worker who pays his payroll tax just like puttingoney in the bank which he expects to draw out with interest when he needs it to pay for his needs when he can no longer work. Except SS has a better guarantee that any private savings or investment vehicle can provide, automatically safe from inflation, and providing an efective interest equal to the average growth in the economy..also automatic due to pay as you gof financing. this is not a transfer payment unless you regard the interest you earn on a private savings account as a transfer payment. the fact that the cash you get when you retire comes from the cash being saved on the same day by someone else saving for his own retirement does not mean that "the young" are paying for the old. This seems to be a hard concept forpeople to understand. Those retirees paid for their own retirement, and "the young" are paying for their own retirement. just like any bank or investment, or even chldren supporting their old parents ...which as a concept is harder for people to understand because "what have you done for me lately, mom?" is not something we usually think of saying.
I'll stop there, but you made a good enough start that i think you can understand this if you spend some time actually thinking about it. I am sorry that sounds like the snark that a lot of people say when someone on the web disagrees with them. but i don't mean it as snark. it takes real effort to rid oneself of all the cheap memes (lies) spread by the non partisan highly paid experts. if you want to risk a serious conversation i'll risk sending you my email.
A CWD is similar in justification to C. H. Douglas' universal dividend which was that it is the cultural heritage of every citizen for the accumulated technological innovation of the ast few centuries. UBI/universal dividend is monetary gifting and so aligns with my new monetary paradigm of Direct and Reciprocal Monetary Gifting. Its a very good policy but not quite a paradigm change like my 50% Discount/Rebate at retail sale and similar policy at point of loan signing. And yes paradigm changes are so beneficial, problem resolving and orthodoxy destroying that they are "an idea whose time has come" and hence irresistible.
MMT, a very good and valid palliative reform. However, wed to the strategically implemented policies of the new applied idea/paradigm of Monetary Gifting it could enable probably only the fourth mega-paradigm change in the history of the human species.
The Integration of The Opposites of Macro and Micro-economics with The New Monetary Paradigm
Macro-economics is about aggregates. Micro-economics is about separate economic agents individual and commercial. Macro-economics, while a legitimate study, basically abstracts the individual out, and micro-economics fails to address certain realities discoverable in economic aggregates.
My new macro-economic insight that 1) retail sale is the single aggregative as in universally participated in point in the entire economic process, and that it is thus 2) the most efficacious and beneficial point to implement monetary policy along with a new monetary paradigm of Gifting utilizing 3) the same means of money creation used by banks and governments to create money, namely equal debits and credits that sum to zero 4) enables us to integrate macro and micro-economics and resolve the stickiest problems of the current monetary paradigm like chronic erosive inflation, chronic individual monetary scarcity and increasingly rigid theoretical dualisms that do not and will not resolve.
Finally, it enlightens the fact that “free” market theoretics is 1) a fetish, 2) largely an unperceived misnomer for the actual reality which is chaotic and monopolistic financial domination via the current monetary paradigm for the creation and distribution of new money AKA Debt Only and 3) which enables periodic financial “innovation” to destabilze economies with the current paradigm and yet the perpatrators of such are bailed out while the victims of that chaos must “go scratch”.
Such beneficial integrations of conceptual opposites, temporal universe inversions of reality and problem resolutions are classical historical signatures of paradigm change.
Strategically integrating the policies of the new monetary paradigm of Direct and Reciprocal Monetary Gifting will implement actual individual economic freedom and economic free-flowingness.
Thank you non-Nobel prize committee for economics.
Without taking sides on whether it's a good or a bad thing, or indeed a necessary or an unnecessary thing, the following is the case
If a Sovereign Wealth Fund is used to buy domestic assets, it's nationalisation because the US federal government ends up owning or creating some US industry.
If an SWF is used to buy foreign assets, the effect is similar to that of an IMF loan, in that it supports the value of the US dollar as a reserve currency. It means that the country which.the investment took place in needs to sell exports to the US, directly or indirectly, in order to collect USD to pay dividends to the SWF. The only difference being that an IMF loan can in principle be repaid, whereas an SWF investment is, in principle, for ever.
derek
i don't know why your comment is isolated by a click to read, but i imagine that what you are saying is probably true. but once you get rid of words that don't necessairly mean anything, what would having an swf do that not having one can't do? as far as i can see it would provide a way for the government ot earn money without taxing people who are trying to kill the governmnet because they think taxes are theft. it appears also to be true that there are risks the fund could cause great harm because it creats an unaccountable power which whether owned by "the government" or private enterprise ca nbe used to corruptly control the government by a cabal of the very rich. i am not here expressing any view for or against a swf, but i don't think you have said anything that helps anyone understand the issues "nationalization"? is that good or bad? how would it work? an IMF loan? how does that work out? i don't know and those words don't help me, though there meaningmay be obvious to someone who knows a lot more than I do. does an swf have to be a vehicle for international trade, or could it work like an investment bank for the same sort of investments the country makes now by deficit spenting or mmt-created money, but outside the tax=and=spend cycle...?
The truth of the tRUmp SWF is clear, while it is true "You’ve got a sovereign currency; you don’t need a sovereign wealth fund" the real point is stated earlier...
"a vehicle to warehouse conflicts of interest and corruption"
I suspect crypto will fit into this SWF scheme somewhere.
Frankly it's beyond baffing what little knowledge people have of the monetary system but to me just like DOGE, this SWF nonsense seems like another scam to line the pockets of the wealthy. Once again for the people in the back, the US government is self-funding, it issues the currency plain and simple.
Why would any country want to establish a sovereign wealth fund? If you have extra cash hanging around, spend it on your citizens and make their lives better!