If Trump wants to fix the economy, he should focus on fixing the debt and hardening our money.

The following article was originally published by the Mises Institute. The opinions expressed do not necessarily reflect those of Peter Schiff or SchiffGold.

In his February 3 Executive Order, President Trump directed his minions to begin planning for establishment of a "Sovereign Wealth Fund" that he originally touted in a speech to the Economic Club of New York last September. The fund would be on the order of $2 trillion, investing in things like manufacturing hubs, defense, and medical research. The order states:

It is the policy of the United States to maximize the stewardship of our national wealth for the sole benefit of American citizens. To this end, it is in the interest of the American people that the Federal Government establish a sovereign wealth fund to promote fiscal sustainability, lessen the burden of taxes on American families and small businesses, establish economic security for future generations, and promote United States economic and strategic leadership internationally.

This order reflects a new anti-capitalist economic orientation of the Republican Party, embracing fallacies that government can somehow be made efficient, that tariffs can perform miracles like saving the fiat dollar from destruction, and that selecting the right executive personnel is a substitute for rule of law. Republicans have evidently forgotten the eternal economic truth that planning not driven by free markets doesn't work; government shouldn't be trying to pick winners and losers in the business world. Whatever claim Republicans had to being pro-liberty, pro-Constitution, pro-free market, etc. is gone now.

To be sure, it is undeniably true that America is not on a path towards fiscal sustainability and future economic security, and it is losing its economic and strategic leadership in the international arena. However, one does not "maximize the stewardship" of American wealth by forcing the American people to hand it over to presidential appointees. The fact that numerous other states possess such collectivized investment arrangements (a talking point that Trump repeatedly stresses) is not a valid excuse for America to commit a similar blunder.

In a passage from A Critique of Interventionism, making the case that government-controlled enterprises can't escape the inefficiencies of bureaucratic management, Ludwig von Mises explained how responsible stewardship of capital goods is, in fact, maximized by private ownership of the means of production in conjunction with an unhampered market:

The entrepreneur operates on his own responsibility. If he does not produce at lowest costs of capital and labor what consumers believe they need most urgently, he suffers losses. But losses finally lead to a transfer of his wealth, and thus his power of control over means of production, to more capable hands. In a capitalistic economy the means of production are always on the way to the most capable manager, that is, to one who is able to use these means most economically to the satisfaction of consumer needs. A public enterprise, however, is managed by men who do not face the consequences of their success or failure.