AMERICANDIVIDENDFUND EST·MMXXVI American Dividend Fund Est. July 4, 2026 · A nonpartisan policy laboratory

Proposal № 009 of 250  ·  Released July 12, 2026

The Permanent Fund Compact

Twenty states already run permanent funds. Give all fifty the machine, and prove the national one at state scale.

The Long GameShare on X

The problem

The best argument for the American Permanent Fund (№ 001) is not theory. It is that America already runs the experiment: quietly, profitably, in red states. Texas has compounded a school endowment since 1854. Alaska mails owner's checks every October. New Mexico's fund crossed $50 billion and now pays for early childhood education. North Dakota built a Legacy Fund from oil in barely a decade.

Meanwhile roughly thirty states have no permanent fund at all. They send one-time windfalls straight into operating budgets: legal settlements, mineral leases, federal grants, surplus years. The money is spent once and gone forever. Tobacco-settlement money is the cautionary tale: a quarter-century annuity, largely consumed, compounding for no one.

The proposal

An interstate Permanent Fund Compact, with a federal sweetener:

  1. A model charter: the same governance spine as № 001: independent trustees, published holdings, ethics screens, principal untouchable, smoothed payout rule. Any legislature can adopt it in one bill.
  2. A shared investment utility: a public, at-cost asset manager the compact states co-own, running index-style portfolios at single-digit basis points. A public Vanguard for public money. Small states get Norway-grade execution without building forty duplicate bureaucracies.
  3. The federal match: one federal dollar for every ten dollars of new state principal, for ten years. Cheap, catalytic, and expiring.
  4. A published league table: every fund's size, costs, returns, and payout, one page, annually. Governors compete on everything; let them compete on compounding.

How it would work

Nothing here requires a constitutional amendment or a new agency. The compact clause has run interstate institutions since the founding; the investment utility can live inside an existing one. States choose their own beneficiaries: schools, dividends, pensions, pre-K. The Compact standardizes the machine, not the mission. Every state charter adopted is a dress rehearsal, at survivable scale, for the national fund. By the time № 001 reaches the floor of Congress, forty statehouses will have already debugged it.

The numbers

State and local one-time windfalls run tens of billions annually: settlements, resource revenues, surplus years. Capturing even a third into chartered principal, matched federally at 10 percent, builds roughly $150 billion of new permanent capital per decade before a dollar of returns. The compounding does the rest. New Mexico's fund earned more from investments last year than the state collected from personal income tax. The moment a fund starts outworking a tax, the politics change permanently.

The honest objections

"Markets crash; public money shouldn't ride them." Payout smoothing (five-year averaging) plus an untouchable-principal rule is exactly how Texas rode out 1929, 2008, and every panic between. The risky strategy is the current one: spending windfalls at the top of every cycle.

"Federal matches come with federal strings." The match expires by design and attaches to the charter, not to Washington's investment opinions. States that want no match can join the Compact for the utility and the league table alone.

"This just delays spending the money on people who need it now." The payout rule is spending on people: every year, forever, growing. The question is whether a windfall helps one budget cycle or every future one. Texas schoolchildren have been winning that argument for 170 years.

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