A new proposal from USA Positive Expectations advocates for a novel approach to address federal deficit and inequality by leveraging the Federal Reserve's monetary policy. The plan suggests that the private sector could fund high-quality early education programs, with the Fed purchasing these investments as assets, thereby reducing the national debt without triggering inflation. The proposal, detailed on their website, argues that such a transformation would take 30-40 years to reach national scale but could be implemented in smaller counties within 3-6 years.
The core idea involves creating 'receipts money' through a mechanism called 'FED NEXT,' where the Federal Reserve buys assets backed by early childhood education outcomes. These assets, referred to as 'Brain Gold,' represent the cognitive development of children, which the proposal argues has tangible economic value. By purchasing these assets at market value and gifting them to the Treasury, the Fed could reduce the federal deficit without increasing the money supply, as the funds would be used to pay down debt rather than circulate in the economy. This would address the growing fiscal interest burden while promoting equal opportunity.
The proposal highlights that a county with 10,000 first-grade students could see $750 million in annual asset purchases, contributing $7.5 billion to federal debt reduction at scale. Additionally, it suggests that such a program could reduce local taxes by shortening public schooling from pre-K through 12th grade to grades 1-10, easing property tax burdens. The initiative calls for an 'email march' on the Fed to consider these elements, emphasizing that current monetary policy is unsustainable and needs private-sector involvement.
Drawing on the ideas of economist George Gilder, the proposal argues that real economic growth stems from investment in human intellect and knowledge. Early childhood development, particularly from ages 0-6, creates neural networks that are 'irreplaceable and irreversible,' forming a basis for future productivity. The private sector already monetizes this through paid early education, but public funding for 'better and best' outcomes is lacking, perpetuating disparities. By formalizing this value, the Fed could help close opportunity gaps.
The plan acknowledges its speculative nature, as it relies on the Fed's unique ability to purchase assets at cost and gift them at market value. Full-scale implementation could involve 4.5 million children annually, costing $340 billion, and potentially reducing federal debt by $3.4 trillion per year. The proposal is not without challenges, but it presents a long-term vision for aligning monetary policy with social goals.
Thomas D. Wolfgram, CEO of USA Values, LLC, is leading the initiative. He invites private sector stakeholders to join the effort by visiting the website and reviewing the proposal. The initiative restarts after receiving positive feedback from AI analysis, though it acknowledges the difficulty of gaining Fed approval.
