A new proposal from USA Positive Expectations suggests that the private sector could drive a transformation in early education funding, potentially reducing the federal deficit without raising taxes. The plan, which would take 30-40 years to reach national scale, aims to eliminate opportunity disparities by investing in high-quality early childhood education, starting with first-grade public schools.
The core idea involves monetizing the positive expectations of equal opportunity through private sector investments. The proposal introduces the concept of "FED NEXT," where the Federal Reserve would purchase assets created by private sector investments in early education. These assets, representing the present value of improved educational outcomes, would be gifted to the U.S. Treasury to reduce the federal debt. The Fed's unique monetary policy power allows this without causing inflation, as the cash paid for the assets goes directly to debt reduction without entering circulation.
At full scale, the plan estimates that 4.5 million children starting first grade each year would require $340 billion in Fed purchases annually, potentially reducing the federal debt by $3.4 trillion per year. A county-level test with 10,000 children would involve $750 million in annual purchases, contributing $7.5 billion to debt reduction at scale. The proof of concept would take 3-6 years to implement fully, and local taxes could be reduced by three years (from Pre-K to 12th grade to 1st to 10th grade), addressing local affordability issues.
The proposal draws on the ideas of George Gilder, who championed the private sector's role in economic growth through human intellect and creativity. Extending this to "Brain Gold," the high-value neural networks developed through quality early childhood education, the plan argues that these are already monetized in the private sector when parents pay for early education. Formal recognition of this value could help offset federal debt while reducing disparities in opportunity.
To advance this idea, the group is calling on private sector members to join an "email march" to the Federal Reserve, encouraging consideration of these FED NEXT elements. The proposal acknowledges the challenge of getting the Fed on board but highlights the unsustainable nature of current fiscal and monetary policies.
Thomas D. Wolfgram, CEO of USA Values, LLC, is leading the initiative. For more information, visit USA Positive Expectations.
