Here's why critics are opposing Donald Trump's proposal to set up US sovereign wealth fund

NEW YORK CITY, NEW YORK: Donald Trump faced backlash on Thursday, September 5, after proposing the creation of a sovereign wealth fund for the United States.

During a speech and a brief question-and-answer session, the former president expressed dissatisfaction with the current state of the US financial infrastructure, claiming the country is one of the few without such a fund.

Donald Trump reveals wealth fund plans

Before he revealed his wealth fund plans, Donald Trump asked his audience at the Economic Club of New York why the United States does not have a wealth fund.  

"Other countries have wealth funds. We have nothing. We are going to have a sovereign wealth fund. We will put tremendous amounts of money through all this money we'll be taking in through tariffs," said the Republican presidential candidate.

What is a sovereign wealth fund?

A sovereign wealth fund is a state-owned investment fund used by several countries including Saudi Arabia, the United Arab Emirates, and Kuwait to invest public money into various assets, ranging from stocks and bonds to real estate.

However, critics were quick to point out potential pitfalls in Trump's wealth fund plan, particularly around the purpose and management of such a fund, according to Raw Story.

The concept of "sovereignty" in this context refers to supreme power, typically the collective will of the people in democratic societies.

Concerns over Donald Trump's wealth fund plans

Donald Trump's wealth fund proposal in his New York speech drew immediate skepticism and concern from commentators who fear the fund could be misused.

Critics voiced concerns that the 78-year-old politician might view the proposed sovereign wealth fund as a "slush fund."

Tim O'Brien, a former Trump biographer, expressed his doubts about the former president's intentions, suggesting that his idea translates to, "I’d like to create a slush fund I can control from the Oval Office."

Lawyer Bradley Moss echoed this sentiment, stating, "He wants a slush fund."

The proposal has raised alarms about increased government control and also a potential misunderstanding of trade tariffs and their economic implications.

Politicians and experts weigh in on Donald Trump's wealth fund plan

Several politicians and experts voiced their disapproval of Donald Trump's plan as they highlighted potential flaws in his economic reasoning.

Criticizing the proposal, Representative Sean Casten (D-IL) said, "There aren't enough hours in the day to flag every time he says something dumb."

"But to be clear here: the implication is we tax imported goods, raise prices to US consumers and DO NOT spur a domestic industry... since that's the only scenario where this BS fund gets funded," he added.

Legal analyst and podcast platform founder Allison Gill also warned of broader implications. "He wants a state-run bank that he controls. Next, he'll seize the means of production," she said.