Amid a financial crisis of historic proportions it may seem odd to focus on a long-term problem. However, extraordinary times offer opportunities to transcend usual narrow interests and create institutions of enduring value. The creation of a US Sovereign Wealth Fund (SWF) represents such an opportunity.
The US should use assets it has already acquired and others it will add in the future, from the Troubled Asset Relief Program as well as other sources. The goal should be to meet the shortfall of pension provision from 2030, when the proportion of retirees will be close to 25 per cent of the population aged 16 and over. One mandate could be to either replace or augment the Social Security Trust Fund and the Federal Old-Age Survivors Insurance Fund, resulting in several positive outcomes both in the short- and long-term.
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