A generations funds to reduce the debt

Question

In Canada, the Province of Quebec created a generations fund in 2006 in order to reduce the debt.

As of March 2023, Québec’s net debt stands at $206.8 billion, or 37.4% of GDP..

Do you know if any other country or state uses this approach?

Answer 1

The Quebec debt reduction Generations Fund is hilarious...

alternative sources of revenue were chosen that are allocated exclusively to the Fund. The Fund's main revenue source is water-power royalties paid by Hydro-Québec and private producers of hydroelectricity. Other revenue sources are mining revenues, the specific tax on alcoholic beverages, and investment income generated by the Fund itself

The quote is from Wikipedia.

A government has the power to regulate its income and expenses through intentions and policies and law.

A government can create a pocket for money and label the pocket the "Generations Fund" and use its power to try to be faithful to an intention to allocate to that pocket the income from specific sources and with the intention to make expenditures out of that pocket for a specific expense. The specific expense might be interest and principal payments on a specific debt.   Since the government continues to have power to regulate its income and expenses, it also has the power to ensure that it "fails" to live up to its earlier intentions. For example, the government can change intentions and policies and laws or a government can lose an election and be replaced.

If pockets make debt reduction inevitable, then the most indebted people would be wearing the pants that have the most pockets. Since pocket proliferation is funny and governments are a reliable source of comedy, I am sure joke governments other than Quebec's do similar things.

For example the United States Social Security Trust Fund is an example of another pocket. It's funded by social security payroll tax and it pays social security obligations as they occur, which means it's a periodic debt.

The Trust Fund is required by law to be invested in non-marketable securities issued and guaranteed by the "full faith and credit" of the federal government.

The government is saying that the only paper (securities) they will put into this pocket is paper that promises to pay the owner of the paper some amount of money from the issuer of the paper, and by the way, the issuer of the paper also happens to be the owner of the paper. This would be even funnier than what Quebec does if it were not for the fact that people openly talk about how this "fund" is not an actual advance funding of future expenses and it's not even close. I imagine Quebec politicians are earnest so I'm ROTFL.

Multiple pockets are welfare destroying. For example, suppose Taiwan has 2 pockets. One is called the general pocket and the other is called the Mars mission pocket. I am supposing that Taiwan has the ambition to pay for a mission to Mars and the income for the Mars pocket is specifically the revenue from taxing alcohol. If China attacks Taiwan, money from the Mars pocket wouldn't be available for defense of the country. It wouldn't be available because if you can read you would be able to understand that the pocket is clearly labelled "Mars". Thus we can see that multiple pockets destroys welfare because the welfare of the Taiwanese is diminished in such a situation. That would be hilarious although it would be sad if they are invaded. I doubt if this will happen because I am not aware of the government of Taiwan being a big joke like the government of Quebec.