A new proposal from USA Positive Expectations outlines a transformative approach to address the federal deficit and disparities in educational opportunity, suggesting that private sector initiatives, coupled with Federal Reserve monetary policy, could create significant economic benefits over the next few decades.
The plan, which emphasizes 'first-things-first equal opportunity,' proposes that better and best early education outcomes starting in first-grade public schools could be achieved without additional taxes. The transformation would be driven by the private sector and would take 30-40 years to reach national scale, though a good-sized county could see results in 3-6 years.
Central to the proposal is the concept of 'fiscal monetization,' where private sector actions lead to the creation of 'receipts money' as a 'FED NEXT' opportunity. Under this scenario, the Federal Reserve would purchase assets related to early childhood education investments, gifting them to the U.S. Treasury to reduce the federal deficit. The proposal argues that this would not cause inflation because the cash would pay down debt without adding to circulation.
The idea draws on the work of economist George Gilder, who champions the private sector and the power of human intellect. The proposal extends his thinking into 'Brain Gold,' the high-value neural networks created through quality early childhood development. It argues that when children enter kindergarten ready to learn, their developed brainpower has a present value that could be monetized to offset federal debt.
Full-scale estimates suggest that if 4.5 million children start first grade at a cost of $75,000 each, the Federal Reserve could purchase $340 billion in assets annually, potentially reducing the federal debt by $3.4 trillion each year. A county with 10,000 children would represent a $750 million annual purchase, contributing $7.5 billion to debt reduction at scale.
The proposal also highlights potential local benefits, including reduced taxes for grades 1 to 10 instead of PreK to 12, addressing affordability concerns. It calls on private sector members to join an 'email march' to encourage the Federal Reserve to consider these elements.
Thomas D. Wolfgram, CEO of USA Values, LLC, is leading the initiative. He notes that the Federal Reserve, as the only corporation with such monetary policy power, could play a pivotal role. The proposal is open for discussion, and more information is available at www.usa-positive-expectations.com.
