Trump has just proposed a sovereign wealth fund, White House officials have revealed they have been "plotting" for months.

According to multiple media reports, the White House in the United States is currently preparing to establish a US sovereign wealth fund for large-scale investments in key strategic areas. On Friday (September 6) local time, a White House official revealed to the media that senior members of the Biden administration, including National Security Advisor Jake Sullivan and his deputy Daleep Singh, have been quietly developing this plan. According to reports, Sullivan and Singh have been working on this project for several months, holding brainstorming sessions every week, meeting with economic experts from the National Security Council to discuss the size, structure, funding, leadership structure, and protective measures of the proposed fund. The official stated that discussions are actively ongoing regarding the fund's structure, funding model, and investment strategy. He emphasized that the project has reached a "sufficiently serious" stage, with other government agencies involved, and they plan to discuss the next steps with key stakeholders from Congress and the private sector. Another source mentioned that planning documents for the sovereign wealth fund have been circulated among White House staff and major institutions, and individuals focusing on this work hope to formally finalize the proposal within the remaining months of President Biden's term. Trump first proposed a sovereign fund While White House sources claim that the discussions have been ongoing for months, the idea made its first appearance on the political stage this week because former President Trump unveiled an economic policy proposal on Thursday. Prior to this, there were hardly any reports on a sovereign wealth fund. On that day, Trump mentioned at the New York Economic Club that if elected, tariff revenues would be injected into a sovereign wealth fund, stating, "We will be able to invest in state-of-the-art manufacturing centers, advanced defense capabilities, cutting-edge medical research, and help save billions of dollars in disease prevention costs." This idea garnered support from hedge fund billionaire John Paulson. Paulson, who was present, stated, "It would be a great thing if we could see America joining this lineup, having reserves instead of debt." He continued, "Over time, the size of this fund will exceed any existing fund." The 68-year-old Paulson is among potential candidates for Trump's treasury secretary. Increasing Acceptance For a long time, the lack of a national sovereign wealth fund in the United States is primarily due to its economic structure, fiscal policies, and historical traditions. Firstly, the US has developed and complex capital markets, with corporate financing primarily relying on private investments, stock markets, and bond markets. This means that the US government usually does not need to conduct large-scale investments or reserves management through a sovereign wealth fund, as in other countries. Since the US has historically relied on borrowing for financing, and has been in a fiscal deficit position for most of the time, there has not been a massive fiscal surplus to establish a sovereign wealth fund. Additionally, establishing a sovereign wealth fund implies a more active investment role for the government in the economy, which is not completely consistent with traditional American free-market beliefs. Furthermore, due to the special status of the US dollar, the US faces less pressure in foreign exchange reserves and does not need to manage foreign exchange assets through a sovereign wealth fund. It should be noted that some states in the US have their own funds, but this mechanism has not been implemented at the national level. Establishing a sovereign wealth fund requires bipartisan support and collaboration between the private sector and government, which may be challenging in the current political environment. However, in recent years, with changes in the global economic landscape, especially with increasing competitive pressures, more voices believe that the US could benefit from establishing a sovereign wealth fund to strengthen investments in strategic industries and supply chain stability. The White House official mentioned earlier stated that the initial idea for establishing the fund was because the US lacked patient and flexible capital for advancing strategic interests. The proposed fund could be used to enhance the resilience of supply chains and provide funding to "companies with low liquidity but high repayment capability." He also mentioned that the fund could inject capital into industries with high entry thresholds, such as professional shipbuilding and nuclear fusion, and could also be used to support the establishment of "reserves for key minerals." Last year, a bipartisan group of senators in Congress suggested creating an investment fund to increase social security benefits using its profits. Doubts and Criticisms However, critics argue that a potential sovereign wealth fund could be used by the incumbent president to advance political projects and may have difficulty securing funds, especially as the US continues to see massive deficits, with total national debt exceeding $35 trillion. Jared Bernstein, the chairman of the White House Council of Economic Advisers, told the media that he maintains a very cautious attitude towards the related idea. He also stated, "I have not discussed this issue at any meetings I have attended." American economist Douglas Holtz-Eakin also questioned the necessity of establishing the fund, stating, "What problem is this fund going to solve? In my view, it will not solve any problems. Regardless of who proposes it, it is worthless." Holtz-Eakin said, "This will only remove the process from political review and oversight, which is the last thing we need." This article was adapted from CLS, author: Zhao Hao, GMTEight editor: Li Cheng.