President Trump to Establish US Sovereign Wealth Fund
Commentary by Steven Lofchie
President Trump signed an Executive Order ("EO") calling for the creation of a sovereign wealth fund.
The EO requires the Secretary of the Treasury and the Secretary of Commerce to develop a plan for the establishment of a sovereign wealth fund and submit it to the President within 90 days.
As stated in the EO: "It is in the interest of the American people that the Federal Government establish a sovereign wealth fund to promote fiscal sustainability, lessen the burden of taxes on American families and small businesses, establish economic security for future generations, and promote United States economic and strategic leadership internationally."
President Trump and Treasury Secretary Scott Bessent told reporters: "We are going to monetize the assets side of the US balance sheet for the American people." President Trump said the US may put TikTok in the sovereign wealth fund. According to Secretary Bessent, the fund will be set up "within the next 12 months."
Commentary
In the long run, the creation of a sovereign wealth fund could become a source of corruption and an instrument for government favoritism of businesses in which it has invested. The Trump Administration and DOGE are attempting to put on display—and root out—past instances of government failure. While the creation of a sovereign wealth fund might be successful in the short term, it's fair to consider the longer-term track record of the US Government in discretionary expenditures.
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