Both the grand and modest proposals for addressing the debt ceiling are misconceived. Like much of what comes out of Washington these days, it is not particularly inspiring. The idea of shared sacrifice as a public value is fine. However, why should many Americans, who have become accustomed to shouldering most of the sacrifice, get excited about taking on additional burdens? Moreover, neither Democrats or Republicans have made a compelling case for how this exercise in shared sacrifice will produce a brighter tomorrow.
Rather than focus on an approach that is either obsessed with cuts/cuts/cuts or else cuts/cuts/revenue as the solution, we need to build a bright tomorrow into the deal.
I propose a Future Fund:
For every $100 cut, we put aside $10 for our future. We use this Future Fund to capitalize initiatives that will leverage outside private capital to advance our public good. Today, hundreds of billions of dollars sit in private equity, hedge, sovereign, pension, insurance and other funds eager to find ways of rebuilding America. We need to grow the pie of capital investing in America. However, that pie should be mostly made up of private money, not public.
Our Future Fund would use its public money as honey to attract this enormous pool of private capital into essential initiatives. For instance, a small amount of public money could go to efforts under the Competes Act to increase private investment in science and technology. Similarly, future fund money could be directed into the Small Business Administration's regional innovative cluster initiative. Also, our Future Fund could capitalize the American Infrastructure Bank supported by President Obama and also a growing bipartisan group within the Senate and the House, including Senators Kerry, Hutchison, Graham, and Warner.
We could, for instance, snip a little out of ethanol, oil, millionaire and other subsidies. And, direct it toward increasing available private capital.
The advantage of a Future Fund is that it would not be a public investment fund nor a privatization scheme. Instead, it would be a public-private-partnership fund aiming to increase the pools of capital available to entrepreneurial Americans.