One of the most interesting ideas that comes out of Gar Alperovitz’s America Beyond Capitalism is using the government as an investor. The government already invests in infrastructure, education, and so on, but with the exception of pension funds, the government rarely invests directly into the stock market or other conventional investment vehicles. Alperovitz thinks they should. A government investment fund would allow the government to raise revenue without taxation, and capture some of those pesky capital gains that seem to so many to be unjustly earned.

Alaska already has such a fund, out of which they pay dividends to every Alaskan citizen. Interestingly, the Alaska Permanent Fund is essentially a basic income system, which is funded by government ownership over some of the means of production. The returns on such a fund could of course go to any number of other things including direct government spending.

Generally, to get such a fund off the ground, one would need to capture revenue through taxation, ideally some sort of wealth tax. But right now the federal government can borrow at absurdly low rates. For instance, the federal government can borrow money for 5 years at 0.65%, 7 years at 1.04%, and 10 years at 1.58%. Although unorthodox, I see no reason why the federal government could not start building a government investment fund right now. Assuming such a fund could get higher returns than those interest rates — and if professionally managed, surely it could — borrowing money to invest it could be a big profit center for the federal government in the short term.

The federal government could take its earnings from this borrow-and-invest scheme and use them as the starting point for an Alaska-style Permanent Fund. Or — more boringly — the federal government could use the earnings to cut down on the deficit somewhat.