A sovereign wealth fund is essentially an investment portfolio owned by the government. Scores of countries, and even some U.S. states, have one. The fund would ease two persistent problems. The first is that big business occasionally needs help through a crisis. The second is that small businesses and individuals are just as deserving, of course, and perhaps more so.
Bailouts have generally been poor investments. A sovereign wealth fund would buy struggling companies at deeply discounted prices. The fund would impose the same onerous terms one would encounter in private-sector deals. Think of it as a national Robin Hood, extracting value from big business and passing it on to the little guy. It would also allow the government, and all Americans by extension, to fully participate in the gains.
The benefits of a sovereign wealth fund would endure well beyond the occasional crisis. The fund could retain the equity stakes it acquires during downturns. Dividends it generates could be used for education or research or even a universal basic income. With interest rates near zero, it should have little trouble generating a return higher than the cost of borrowing if managed competently. The U.S. will spend more than enough on bailouts during this crisis.
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The U.S. Would Benefit From a Sovereign Wealth Fund