Setting aside the sheer logistical impossibility of financing the federal government through tariffs alone, it is unclear what exactly would be achieved.
Because that’s where the money that is put into the fund comes from. Otherwise you’re putting in money that should probably be used to balance the deficit.
but how is this different than some hedge fund or bank using money the government didn’t have but still spent, using that money to invest into something? Because as I understand it, sovereign wealth funds are just the govt investing into stuff that has a long term gain
I decide to start a business. I borrow a million dollars from the bank at 2% interest.
I now have a million dollars cash, and a million dollars of debt. Logically, rather than investing my million dollars of cash in building and growing a business, I should use it to pay off my debt. That’s clearly the the best use for that money.
Do you see how what you’re saying doesn’t make any sense?
ik, but hypothetically, why would a surplus be needed?
Because that’s where the money that is put into the fund comes from. Otherwise you’re putting in money that should probably be used to balance the deficit.
but how is this different than some hedge fund or bank using money the government didn’t have but still spent, using that money to invest into something? Because as I understand it, sovereign wealth funds are just the govt investing into stuff that has a long term gain
I decide to start a business. I borrow a million dollars from the bank at 2% interest.
I now have a million dollars cash, and a million dollars of debt. Logically, rather than investing my million dollars of cash in building and growing a business, I should use it to pay off my debt. That’s clearly the the best use for that money.
Do you see how what you’re saying doesn’t make any sense?
You don’t take out a loan to put into a savings account. That’s how you lose money.