A new proposal from USA Positive Expectations outlines a transformative approach to addressing the federal deficit and educational disparities by leveraging the private sector and the Federal Reserve's monetary policy. The plan, which emphasizes 'first-things-first equal opportunity,' suggests that better early education outcomes can be achieved without raising taxes, by creating a new form of 'receipts money' that the Federal Reserve would purchase, thereby reducing the national debt.
The concept involves the private sector creating assets based on the present value of improved early childhood education. These assets would be purchased by the Federal Reserve, which would then gift them to the U.S. Treasury, effectively reducing the federal deficit. According to the proposal, this would not cause inflation because the cash used to purchase the assets would pay down debt without adding to the money supply in circulation. The Federal Reserve, being the only corporation with such monetary policy power, could facilitate this process, with the gift recorded at market value as standard accounting practice.
At full scale, the plan estimates that 4.5 million children starting first grade each year at a cost of $75,000 per child would result in $340 billion in assets purchased annually by the Federal Reserve. This could reduce the federal debt by an estimated $3.4 trillion per year. A county-level pilot with 10,000 children would represent a $750 million annual purchase, contributing $7.5 billion to debt reduction over time, demonstrating the significant potential even in a test phase.
The proposal also suggests that the county, school district, and city taxes could be reduced by three years (from PreK-12 to grades 1-10), addressing local affordability issues within property tax structures. The proof of concept would take 3-6 years to scale to 100% of children in a county.
The initiative calls on the private sector to join an 'email march' to the Federal Reserve to consider these elements, which include creating receipts money, addressing the federal deficit, and promoting high-quality full employment. The proposal draws on the ideas of George Gilder, who advocates for the private sector and the power of human intellect. Gilder's concept of 'Brain Gold'—the high-value neural networks developed through quality early childhood education—is presented as a private-sector pathway to real money creation with a present value that can be monetized.
Thomas D. Wolfgram, CEO of USA Values, LLC, leads the effort, and more information can be found at USA Positive Expectations. The proposal acknowledges that getting the Federal Reserve on board will be challenging but emphasizes the potential benefits of testing this private-sector-driven solution to national challenges.
