Proposals for a federally based sovereign wealth fund (SWF) have emerged almost simultaneously, though separately from the Biden White House and the Trump campaign. Such pools of money usually invest dedicated revenue streams for the public’s benefit. They have been around for years, mostly in oil-producing nations, to offer income after that time when the oil runs out. Those of Saudi Arabia and Norway are prominent. Some twenty-three states also have such funds, Alaska’s $78 billion Alaska Permanent Fund prominent among them, again associated with oil wealth. Globally, SWFs control some $12.4 trillion in investable funds. However, for all the good that such funds do and will do elsewhere, a federal SWF in the United States would be a mistake.

The most immediate problem would emerge with how the monies are held. If, as is the case of other SWFs, the money goes into stocks, bonds, and other business interests, a Washington-based fund would soon become a major shareholder and bondholder in American corporations. This is not a problem for other SWFs. National funds, like those of Norway and Saudi Arabia, buy into largely foreign companies. However, because U.S. stocks........

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