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Macro Economics

The US is saving for retirement—and TikTok

With a multi-trillion dollar deficit in 2024, it's unclear where the money for a fund will come from.

A dollar sign looming over a stack of papers with a pen balanced on top

Illustration: Anna Kim, Photos: Getty Images

3 min read

Trump’s second stint in the White House has been marked by a number of firsts.

Today, we got another unprecedented event: Trump signed an executive order to start the process of creating an American sovereign wealth fund.

Sovereign wealth funds are like regular old investment vehicles, but they’re owned by a national government. The goal of a sovereign wealth fund depends on the country, but they are usually meant to generate income for the future, stabilize revenue streams, or as a resource for economic policy.

But Trump has floated another, far more concrete, idea: using a sovereign wealth fund to purchase TikTok, which he has been trying to rescue from a ban passed by Congress a few weeks ago.

How does this work?

There are about 90 state-owned funds throughout the world that collectively manage about $8 trillion, according to the International Forum of Sovereign Wealth Funds. The largest of these is Norway’s Government Pension Global Fund, with over $1.7 trillion in assets under management, followed by China’s Investment Corp with $1.3 trillion. Other nations with wealth funds include Saudi Arabia, Abu Dhabi, and Singapore.

Many of these countries finance their funds with surplus profits from excess resources. Saudi Arabia, for instance, uses its vast oil reserves to fund public works projects, among other things.

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Unfortunately, that puts the US in a difficult position, since we’re terrible at budgeting (the last time the US achieved a budget surplus was 2001). The US deficit hit $1.83 trillion in fiscal 2024, which makes funding a fund like this especially difficult.

During an Oval Office ceremony, Treasury Secretary Scott Bessent said the fund could “monetize the US balance sheet for the American people.”

As far as that balance sheet goes, the US has about $5.6 trillion in assets as of the end of the government’s fiscal year in September 2024. The majority of that is locked up in real estate (just under $1.77 trillion) and student loans ($1.37 trillion), with a measly $1.18 trillion in cash.

That means all roads inevitably lead back to tariffs, which Trump argued will create the revenue to create the fund back when he was campaigning. But beyond that, he hasn’t outlined any more details about how it will be paid for and what exactly its portfolio will look like.

Regardless, that hasn’t stopped the president and his advisors from putting a shockingly short timetable together.

“We’re going to stand this thing up within the next 12 months,” promised Bessent.

Now that the US is going to be investing, maybe it's time for America to sign up for this newsletter.—LB

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Stay up to date on the latest market news with daily analysis of the investing landscape, served up Brew-style.