A proposal from USA Positive Expectations, a private sector initiative, outlines a novel approach to addressing the federal deficit by leveraging the Federal Reserve’s monetary policy to fund early childhood education. The plan, detailed in a press release, suggests that the Fed could purchase assets tied to early education outcomes, thereby creating ‘receipts money’ and gifting these assets to the U.S. Treasury to reduce the national debt.
Thomas D. Wolfgram, CEO of USA Values, LLC, is spearheading the effort. The initiative, which has been in development for some time, is based on the idea that investing in high-quality early education for children ages 0-6/7 creates ‘Brain Gold’ – neural networks and cognitive abilities that have tangible economic value. By monetizing this value, the private sector could generate significant returns, and the Fed’s purchase of these assets would inject capital into the system without causing inflation because the resulting cash would be used to pay down debt, not increase circulation.
The proposal estimates that at full scale, the plan could involve 4.5 million children starting first grade annually, with a cost of $75,000 per child, totaling $340 billion in assets purchased by the Fed each year. This could lead to a reduction of $3.4 trillion in federal debt annually. A county-level pilot with 10,000 children would involve $750 million in purchases, contributing $7.5 billion to debt reduction at scale.
The plan also suggests that local taxes could be reduced by shrinking the public school footprint from pre-kindergarten through 12th grade to grades 1-10, addressing property tax burdens. However, the proposal acknowledges that it would take 30-40 years to reach national scale, though a county could achieve scale in 3-6 years.
Wolfgram points to the ideas of economist George Gilder, who emphasizes the power of human intellect and entrepreneurial creativity as the ultimate resource. Extending this, the plan argues that early childhood development is an investment in ‘Brain Gold’ that should be recognized in monetary policy.
The initiative calls for a ‘FED NEXT’ opportunity, where the Fed purchases these assets to keep the ‘RRFC’ (presumably a regional or county-level financial entity) viable, then gifts the assets to the Treasury. The Fed, as the only corporation with such monetary policy power, could record the gift at market value, a normal accounting practice.
Despite the potential benefits, the proposal faces significant obstacles. The Fed’s mandate is focused on low risk and stable money, and it may be reluctant to engage in such unconventional monetary policy. Wolfgram acknowledges this, stating, ‘It will not be easy to get the FED on board.’
To build support, the initiative is encouraging private sector members to join an ’email march on the FED.’ Interested parties can visit USA Positive Expectations to read letters and learn more about the proposal.
The plan is described as a transformation that could be tested at the county level, with proof-of-concept taking 3-6 years. The press release emphasizes that this is a private sector-driven approach, not a new tax, and aims to eliminate disparities in opportunity by ensuring that all children start first grade with the skills they need.
While the idea is ambitious, it raises questions about the role of the Federal Reserve and the feasibility of monetizing human development. The proposal is currently in the early stages, and its success depends on gaining traction among policymakers and the private sector.
