A novel proposal from USA Positive Expectations outlines a private-sector-led transformation that could address both educational disparities and federal debt without raising taxes. The plan, detailed in a recent press release, suggests that by focusing on high-quality early education from first grade onward, communities can create tangible economic value—referred to as 'Brain Gold'—that can be monetized to reduce the national deficit.
The concept hinges on the Federal Reserve's unique monetary powers. Under the proposal, private sector entities would fund better and best early education outcomes, creating assets whose present value could be purchased by the Federal Reserve. This purchase, termed 'FED NEXT', would generate 'receipts money' that the Fed could gift to the U.S. Treasury, effectively paying down debt without increasing the money supply in circulation. The press release emphasizes that this would not cause inflation because the cash would be used to retire debt, not stimulate spending.
The scale of the idea is substantial. By 2027, if 4.5 million children start first grade with a $75,000 investment each, the annual cost would be $340 billion. At full scale, the federal debt could be reduced by an estimated $3.4 trillion annually. A county-level pilot with 10,000 children would involve $750 million in annual purchases, contributing $7.5 billion to debt reduction over time. The proposal suggests such a pilot could reach full scale in 3-6 years, and would also reduce local taxes by shifting public school funding from grades PreK-12 to grades 1-10.
The author, Thomas D. Wolfgram, argues that the private sector is better equipped than the public sector to deliver high-quality outcomes. He draws on the work of economist George Gilder, who champions the power of human capital and entrepreneurial creativity. Gilder's ideas, applied to early childhood development, suggest that investing in children's cognitive and neural networks creates real economic value. This value is already recognized when parents pay for private early education, but public funding does not exist to ensure equitable access to such quality.
The proposal calls for a 'march on the FED' via email to encourage the Federal Reserve to consider these 'FED NEXT' elements. The goal is to create a new monetary policy tool that addresses the federal deficit, interest expenses, high-quality full employment, and the fairness of current monetary policy. Wolfgram notes that the Fed's mandate of low risk and stable money may need to be expanded to tackle these long-term issues.
While the plan is speculative and faces significant hurdles, it offers a creative approach to intertwining social progress with fiscal responsibility. The full details, including letters for tone and understanding, are available at USA Positive Expectations.
