We often talk about the huge public debt of the US government. Why does it not invest in the stock market (at least in index funds) instead of issuing debt? Can they not reduce the debt that way?
The US government could do that but policies prohibit this, since buying a specific company's stock benefits the shareholders of that company. This would be a huge conflict of interest.
Another answer by Paul Mulwitz, an online commentator, says “If the government bought ownership in private companies they would no longer be private companies. “
A good example would be if the US government invested in Apple computers. Would it act against the company in case of a violation? There would be a conflict of interest.
Side note, What does the government invest in?
According to the CBO (https://www.cbo.gov/publication/55375) in 2018, the federal government spent $492 billion on investment—for physical capital, education and training, and research and development—which represented 12 percent of federal spending and 2 percent of GDP.