President Trump’s executive order calling for creating a U.S. sovereign wealth fund (SWF) is a shiny object looking for a useful function. The idea that Washington should set up an investment fund when it can’t even manage its own budget is laughable at best and dangerous at worst.

Unlike some other countries with successful SWFs that the president seems to admire — such as Norway, Singapore and the Gulf states — the United States does not have surplus revenue to invest. Instead, it is drowning in debt, with an estimated $80 trillion in net-present-value unfunded obligations.

The fundamental flaw in this proposal is that a U.S. SWF would not generate new wealth; it would merely redirect capital from the private sector to the government. Given the government’s fiscal position, this fund would ultimately rely on government debt to make investments. This is true even if it relied on a dedicated funding stream, such as tariffs or revenues from natural resources or asset sales. The government’s net negative position wouldn’t change.

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