A new proposal from USA Positive Expectations outlines a transformative approach to early childhood education that could reduce the federal deficit without raising taxes. The plan, which emphasizes private-sector involvement, aims to create equal opportunity by improving educational outcomes from first grade onward. The initiative suggests that by investing in high-quality early education, the private sector can generate 'Brain Gold'—the cognitive networks developed in children—which can be monetized to address federal fiscal challenges.
The core mechanism involves the Federal Reserve purchasing assets related to early education investments, a concept the proposal dubs 'FED NEXT.' This would involve the Fed buying these assets to keep county-level programs viable, then gifting them to the Treasury at market value to reduce the national debt. The proposal argues that this would not cause inflation because the cash used to pay down debt does not circulate in the economy. The scale is significant: by 2027, an estimated 4.5 million children starting first grade could represent a $340 billion annual investment, potentially reducing federal debt by $3.4 trillion annually at full scale.
The plan also suggests that a county-level proof of concept could be implemented in 3-6 years, with a county of 10,000 children representing a $750 million annual purchase. This would not only contribute to federal debt reduction but also allow local governments to reduce taxes by cutting school grades from PreK-12 to grades 1-10. Proponents argue this addresses the local affordability crisis within property tax structures.
The proposal is rooted in the ideas of economist George Gilder, who emphasizes the power of human intellect and entrepreneurship. By extending his thinking, the initiative posits that early childhood development creates value that can be formally recognized and monetized. The private sector already invests in early education, but disparities persist because public funding lacks support for 'better and best' outcomes.
The initiative is calling for private sector support to 'email march on the FED' to consider these elements. It acknowledges the challenge of getting the Fed on board but points to positive input from AI models as a reason for optimism. The proposal's website, usa-positive-expectations.com, provides more details and letters for context.
While the plan is ambitious and would take decades to reach national scale, it offers a novel approach to addressing two pressing issues: educational inequality and federal debt. By leveraging the Fed's monetary policy in a new way, it could transform early education funding and fiscal responsibility. Whether the Fed will embrace such a mechanism remains to be seen, but the proposal opens a conversation about the intersection of education, economics, and monetary policy.
