I don't think that actually holds. I hate to trot out the typical example, but Norway seems to be doing pretty well on the social welfare side with a fertility rate much lower than that of the US. They just have very different priorities than the US does in terms of taxation, wealth distribution, and of course deficit spending vs. creating a sovereign wealth fund.
I don't see any reason why the US couldn't maintain social welfare programs in a decreasing population scenario provided the decrease is gradual, productivity rises as fast as the population goes down, and we actually taxed people appropriately and got our expenditure priorities under control.
Why not? You could have a welfare system that redistributes any excess return from the fund above long-run inflation rate, and it would be sustainable.
A significant fraction of the historical rate of return on capital is attributable to the combination of population growth and inflation. Without those the size of the fund you would need to cover a material fraction of government spending would be implausibly large.
Sovereign wealth funds also aren't all that different economically from taxation, in the sense that the profits from what the fund is invested in go to funding government programs rather than being reinvested in private enterprise. If the fund was large enough to be relevant, that would become an issue for the economy.
Norway is also very homogeneous. We are more willing to be generous to those related to us; and I'm not talking just about race, but also culture, values, and ideology. In all these respects, the United States is far more diverse.
So I guess I agree with you, but I don't think those conditions can be replicated here.
I don't see any reason why the US couldn't maintain social welfare programs in a decreasing population scenario provided the decrease is gradual, productivity rises as fast as the population goes down, and we actually taxed people appropriately and got our expenditure priorities under control.