Here’s a thought experiment. Imagine you got a dozen of the top entrepreneurs in the United States together in a room — people who lean to the left, right, and center, and who built the top American companies — and asked them to make a plan: how would they spend a trillion dollars? I’m not talking about buying artwork or planes, or the types of things lottery winners might spend a new fortune on. Rather, how would they spend public money to strengthen the future of American society? And suppose, further, that you could skip the red tape. How would it be different from the way we currently spend trillions?
I am fortunate to know dozens of the top entrepreneurs in the United States. And I can tell you this for sure: if they were involved, the difference wouldn’t just be in what we fund, but how we decide what to fund. Programs would have to compete against one another, a sort of policy gladiator competition. The people that can competently administer programs and achieve goals would get rewarded commensurate with their achievement. Those who cannot would get fired. Funding would be based on outcomes, not promises.
There would still be huge differences in perspective among entrepreneurs, to be sure. But having spent my life in entrepreneurship and policy, it’s reasonable to say that it would be much more interesting and productive than the showmanship that happens between lawyers and career politicians in Washington.
“But Joe — we’re 35 trillion in debt! We don’t have anything left to spend on this thought experiment.”
We agree. But the current drunken-sailor spending isn’t a thought experiment. It’s a reality. We spent $6 trillion on Afghanistan and Iraq. Pandemic spending totaled over $5 trillion. We allocate about $800 billion for the Pentagon every year, and much more than that for healthcare and entitlements. By the end of the decade, interest alone will cost our government over $1 trillion annually. Spending in 2023 totaled over $6 trillion — compared to just $4.45 trillion in 2019. And with cronyism abounding — hundreds of billions funneled to NGOs and other corrupt nonsense — imagine a world in which we spent just some of that money more competently. Instead of another $5 trillion, just $1 trillion (technically $0.9 trillion).
Just to give you a sense of what might be possible with money that our government spends every few months: Elon Musk estimates that for $1 trillion, we could move enough mass to Mars over several decades to build a self-sustaining colony there — if Starship can achieve 1000x cost efficiency over the rockets of the twentieth century through reusability. SpaceX has spent under $10 billion developing Starship.
My spending bias is in favor of liberty; the ethical thing for governments to do is take as little as money as possible, and leave as much as possible to citizens to use as they see fit. It’s especially unethical for the government to use tax money in ways that are less competent than citizens freely spending it. Imagine the futile cries of control-freak bureaucrats screaming that this isn’t allowed — that they are the ones that decide how money is spent, now and forever. Imagine!
So, without further ado: How to Spend a Trillion Dollars, presented in nine parts.
1. For $200 billion, significantly reduce traffic and the cost of living in our fifty largest metropolitan areas
“Keep Austin Weird.” That’s an unofficial motto in Austin, where I moved in 2020.
Keep Austin Weird is, in a way, directed at people like me, the implication being that economic migration, especially by leaders in the tech world, has made places like Austin prohibitively expensive for the “weird” or creative class — artists, musicians, etc.
54% of Americans live in the fifty-largest metropolitan statistical areas. Just the top 25% of metropolitan areas make up 51% of GDP. The top 50 areas represent about 65%. Altogether, 90% of US GDP is in metropolitan areas. In communities like the San Francisco Bay Area, where I grew up, housing has gotten so expensive that many take long commutes to work. In Texas, the annual cost of traffic congestion has reached over $1,000 per commuter in wasted fuel and time, with the average commuter losing 54 hours in traffic each year. Los Angeles residents lose over 80 hours in traffic per year.
Traffic makes many Americans miserable. When we solve it we can give people their time back, give millions better economic access to our biggest cities, and relieve housing pressures. For those who live on the outskirts of cities, or satellite communities, this is an especially pressing problem, considering that those communities could be much bigger and more convenient with the right traffic fixes.
But when Los Angeles can’t build a subway tunnel for less than $1 billion per mile, how could $200 billion meaningfully improve fifty cities? The answer is competence. I once wrote to the mayor of Austin about one new technology with proven economics and very promising prototypes: tunneling. With tunneling advances made possible by companies like the Boring Company, we can increase connectivity for a fraction of the cost of traditional transit infrastructure in the US.

Above ground, autonomous driving is already getting quite good. But by moving some of it underground and boring long tunnels at a much cheaper rate and at a faster clip, we can already outperform public transit projects. For comparison, Austin’s proposed plan is to spend roughly $5 billion to create one additional light rail line at about ten miles in length. Austin’s existing commuter rail line serves just 1,500 people per day at an astronomical cost. More than $5 billion for another single line — about ten miles long — is a joke.
Conservative estimates suggest an automated underground tunnel network built by the Boring Company could transport an entire year’s worth of commuter rail passengers in just two days’ time, while saving over 90% versus above-ground infrastructure, with costs for a single tunnel at about $10 million per mile. Adding a second direction in some places, as well as stations and egress at about every mile brings the cost to approximately $25 million per mile.
In 2020, we mapped out a sample Austin system for $1 billion connecting the airport, several downtown locations, and the Q2 soccer stadium. This project has more connections than the proposed $5 billion above-ground rail line at a fifth the cost. For about $5 billion, it connects a much larger area, with stations farther apart.


The economic models show that this sort of efficient infrastructure spending would pay for itself in a number of years — even in the first year or two. Just in this Austin example, commuters would save 60 million hours of their lives and about 18 million gallons of gasoline annually — representing an annual value of over $1 billion in wages and expenses. And an even larger unlock would happen for people on the periphery of major metropolitan areas, who can live affordable middle class lives with easy access to economic opportunity.
Competently spending $200 billion over ten years on the infrastructure of the future is a slam dunk; it would improve tens of millions of lives, unlock massive development opportunities in our fifty largest metropolitan areas, and unleash the economy in those places for decades to come. And you, dear reader, might not be stuck in traffic ever again.
2. For $100 billion, take back our prison system from incompetent bureaucrats — and reduce crime along the way
America has two forms of Stockholm Syndrome in its approach to criminal justice. Coming from the extremist left, there is a desire to coddle violent criminals and allow repeat victimization in the name of social justice. But across the political spectrum, there is another problem: the total capture of the prison system by bureaucrats, unions, and corporations whose incompetence we tolerate. Speaking of Stockholm: when the American criminologist Francis Cullen won the Swedish government’s Stockholm Prize, he proposed to spend $10 billion on new prisons. His framework is as follows:
1: 10 prisons will be developed, each funded at $1 billion each…
2: A competition of proposals would be undertaken in which states would partner with criminologists and prison experts from around the world as well as with private enterprises to set forth a model for prisons. A panel commissioned by the U.S. Department of Justice would select the 10 winners.
3: Each prison proposal must be shown to be rational, scientific, and to nourish the development of prisoners. That is, it must be shown to be enlightened.
4: In each proposed prison, every prisoner must be engaged every day in an activity (education, work, treatment) that improves their human capital and decreases their criminogenic risks.
5: There would be an ongoing process and outcome evaluation by a team of researchers commissioned by the U.S. Department of Justice.
The Cullen framework is a fine start, if a bit idealistic. Not all prisoners need to be “nourished” — some are hardened killers to be locked away. But approximately 600,000 people leave prison each year, and an estimated 95% of prisoners will eventually return to society. On the margins, the cultures and results in our prisons matter. Bad guard cultures or incompetent management can turn small-time criminals into big-time criminals, which is extremely costly for society — both in money and lives.
We must hold bureaucrats accountable to the results that we know are possible. Millions of lives would change.
Experimentation and competition are vital, not just in a taboo-filled area like prisons, but especially. There are huge performance gaps, and given that we already spend $90 billion on state and federal incarceration every year, the least we can do is make those dollars accountable. We should pay for the results we want: lower recidivism rates and safer communities.
And then, following Cullen, we can give out $10 billion to create new prisons, measure the results carefully, and reward successful models that reduce future costs to society by improving recidivism rates, guard morale, and workforce participation. If a public-sector entity can compete and win, so be it! But if private for-profit or private not-for-profit prison models work better, they should be allowed to win. The people who are terrible at running prisons should be fired, and those who prove competent, rewarded.
One group of experienced prison operators is working to make this concept a reality. Social Purpose Corrections, a non-profit supported by prominent funders and advocates in the criminal justice field, is building an alternative model of prison that is focused on rehabilitation and paid based on the outcomes of its residents after release.
Some may be skeptical that we can “pay for results.” But it’s been done. Look at Arizona’s prison reform in the mid-2000s. The state allowed county governments to collect up to 40% of the cost savings to the state when fewer people under their parole and probation supervision went back to prison. That incentive encouraged local authorities to help probationers and parolees stay crime-free — and reduce unnecessary returns to prison for minor issues like missing a phone call. Probation violations fell, and so did crime. Arizona lost its appetite to keep paying for those results amid the budget crunch in 2008, which is a shame.
So for the same $90 billion we already spend, we could have a much better system by rewarding the models that achieve greater workforce participation and lower recidivism. And on top of that, if we spent $10 billion for ten new experimental, accountable prisons and let them scale over a decade with additional commitments, the positive impacts would be profound — not just in economic terms, but human terms, too.
3. For $100 billion, build 21st century mental health institutions
At the peak of institutionalization in 1955, nearly half a million people were in state mental hospitals and asylums in the United States. The 1962 book One Flew Over the Cuckoo’s Nest (and the movie too) dramatically changed how Americans viewed that system. And not totally without reason: the system had obvious defects, and needed reform.
But generations later, after we ended nearly all institutionalization, we have a serious crisis in our society: many people with serious but treatable mental illnesses that would have benefitted from institutionalization have been left to prison and the street.
Christopher Rufo found that in his home state of Washington, the per-capita number of state mental hospital beds had declined by over 90% since the 1960s. Unless one believes that serious mental illness has also declined by 90% (it hasn’t) then de-institutionalization has gone too far. In Seattle or San Francisco it’s easy to see that truth.
We sold ourselves the lie in the 1970s that we were being humane by ending institutionalization as a practice. But in reality we aren’t spending any less or treating people any better. We have just left the people who would have been institutionalized elsewhere. Sometimes on the street as homeless. Sometimes in their homes to die deaths of despair. Sometimes in prison.
Heather Mac Donald of the Manhattan Institute found that nearly a third of prisoners at Rikers Island in New York City required mental health treatment. A large prison like Rikers spent millions of dollars paying guards to sit 24 hours a day outside the cells of those on suicide watch. That is an obvious case where dedicated institutions would make a real difference.
Why now? The research on mental health and treatment methods are better today than the 1950s and 1960s — not worse. For $100 billion, we could both build new mental health institutions that are transparent, accountable, and humane — that would help hundreds of thousands get the help they need, and run them for ten years. That would reduce strain on prisons, homeless services, hospitals, and other programs that currently absorb the cost of the status quo on the street.
In Miami-Dade County in Florida, a civil commitment program for mentally-ill people that committed nonviolent misdemeanors and citation offenses reduced future jail time, and saved over 50% compared to the state hospital. It is less expensive to civilly commit someone in a dedicated setting than it is to incarcerate them (a staggering percentage of psychiatric beds are actually in prisons — about 50%) or to leave them in regular hospitals and emergency rooms.
Leveraging the cost savings to other municipal and state systems would be a powerful incentive for operators to get this right. The costs to society of total de-institutionalization are sometimes hidden, but they are there. Likewise, the benefits of honestly confronting the mistake would cascade up and down society, likely to the tune of more than we put into it. Those benefits would accrue both to our pocketbooks and to our sense of pride in our civilization and how we take care of those who need it.
This, of course, is a scary thing for a typical leader to do. It’s messy, and it involves a controversial, volatile topic. For it to be done, it requires a strong leader who is unafraid to disobey false dogmas. Great leaders run toward complicated and messy areas to fix what’s broken.
4. For $50 billion, make our inner city streets a place where children thrive
If you came to me out of the blue and proposed spending $50 billion on any social program in an American inner city, even over ten years, I’d be immediately skeptical. We have over 50 years of results from programs since the Great Society — results that do not inspire confidence in the ability of bureaucrats, no matter how well-intended, to improve cultures and economic opportunities for disadvantaged, usually minority neighborhoods. For decades our government has spent money rewarding destitution as a “means” of trying to solve it and propping up special interests.
There is one non-governmental program, however, with extremely compelling results — and key cultural differences that allowed it to succeed. The Harlem Children’s Zone is an experimental community project in its namesake neighborhood: Harlem, in Northern Manhattan. Administered by a non-profit started by Geoffrey Canada, and funded by private benefactors like Ken Langone and Stanley Druckenmiller, HCZ covers an area of approximately 100 blocks in Harlem.
Harlem was, a century ago, the site of America’s renaissance of jazz and black culture; but in the generations that followed, it became poorer and more dangerous, like many inner cities in the US. Geoffrey Canada sought to make real change. HCZ was not welfare. It was not a bloated government program. And it recognized a few fundamental truths that many government and charity programs ignore:
Young men need male role models. When kids get far behind, they don’t usually catch up. Parenting matters, and ugly topics like maternal drug use shouldn’t be ignored.
HCZ confronted problems head-on. They created all-day programs for children in Harlem, including extended-day charter schooling, and before and after school programming. As far as results in social science go, HCZ is a positive outlier. They created incentives for young and expecting mothers to engage in the community and make better decisions.
The combination of private money, community services, and charter school education produced meaningful results in the future lives of kids growing up in HCZ. Future predicted income of the kids increased by double digit percentages. The benefits to the public are enormous: converting a high school dropout to a high school graduate is worth more than $250,000 in public costs over a lifetime.
Test scores went from among the lowest — on par with other inner-city schools — to above average. Whether it can end multiple generations of poverty remains to be seen, but HCZ is profoundly different from the old strategy of throwing money at troubled communities and then looking away. And the total annual spending of HCZ is just $50 million. It’s a scalable idea, but successful replication would require the same frameworks that made it successful in the first place.
There should be no monopolies on city services. We ought to measure results using un-fudgeable metrics, and leave the taboos behind. In the case of HCZ, private money was able to make a difference because it didn’t face the broken incentive structures which choke government programs. HCZ isn’t the only private program that works. And that’s great news, because it means there can be even more competition to provide the best results.
With public systems, it usually is the case that with more destitution comes more money. By putting ideas and methods up against one another and rewarding what works, we can flip that cycle around: systems that create less destitution should receive more money, and everyone else should be incentivized to learn from them.
Let’s make it lucrative to end destitution, not to oversee it. Unfortunately, like #3, this type of bold action requires a non-typical leader. A typical person sees intergenerational poverty and sees it as too intimidating to confront, and asks why he or she should take any heat to try fixing it. But competent leaders run toward the worst problems. This is one of them.
5. For $100 billion, give every baby in America a stake in our economic future.
A Republic like ours will only endure if it has patriotic citizens that believe in the future. It is a question for every generation: how to make sure that the next generation is rooting for the success of the country. Moreover, it’s important for people to root for the principles and economic underpinnings of the country.
Brad Gerstner of Altimeter Capital has a great idea, a virtuous cycle for our country’s population and economic future: give every American child born an index-fund account. The “Invest America” plan would be to give every American child $1,000 in a locked account at birth, invested in the equity markets of the United States. It would, in effect, align every child and family with the US and its businesses.
In this thought experiment of allocating a trillion dollars, we like round numbers, so we’re going bigger: $3,000 for every child, which would be about $10 billion annually for about 3.5 million births.
With $100 billion, we could give 10 years of American babies such an account. Private banks all the way from Main Street to Wall Street could compete to administer the service cheaply and competently along with the Treasury — or even provide more capital themselves. With even conservative growth estimates, it would be a huge bundle of money for millions.
If we had started such a program in 2000, today’s 23 year olds, a year out of college, could have a nest egg of $50,000, or $100,000 for themselves with contributions from themselves, parents, employers, and others. They’d also have a better understanding of how capitalism lifts everyone up.
There are a number of rules we could write and iterate on: perhaps we give payouts when the kids turn 18 as a token of them joining the polity as full citizens. A portion could be used for educational purposes. A portion could be used for purchasing a home. We could trust them to decide for themselves. Those are minor details to be sorted out.
But the real innovation in a simple proposal like this — crazy as it may sound to some — is that right now all we do is saddle future generations with the debt of our country. Why not give them ownership instead? When citizens go to vote, shouldn’t they remember their stake in the long-term future of the United States, and not just their short-term priorities?
Thomas Jefferson said that “an educated citizenry is a vital requisite for our survival as a free people.” For $3,000 each — a miniscule fraction of the total K-12 spending for each child — this would be the most effective educational expenditure ever, one that would teach future generations about the power of capitalism and markets.
6. For $50 billion, restore the American industrial skillbase
Apple CEO Tim Cook once remarked:
“In the US, you could have a meeting of tooling engineers and I’m not sure we could fill the room. In China, you could fill multiple football fields.”
It’s a salient point: the US no longer produces the broad base of skilled workers necessary to operate a huge industrial base. Of course, we’ve been spending plenty on other educational pursuits — including the grievance studies — and Americans have run up nearly $2 trillion in debt for it.
One popular answer in Washington for “How to Spend a Trillion Dollars?” is simply to “cancel” debt — in effect, to rewind the clock and let the crisis start again from scratch. Public appetite for that non-solution is clear: Americans oppose the debt cancellation and enrollment at 4-year colleges is down. In the humanities especially, enrollment has cratered as the fields have become ideologically captured and less useful for graduates and society. The triumph of activism over scholarship and the decline of rigor, paid for by huge amounts of debt, is popular with professors; not so much with students.
But enrollment at vocational schools in skilled trades is up. There is a real appetite among Americans for skilled work that pays well. If we spent money on supercharging the best programs in that category, we’d unleash a new wave of economic possibilities — not just line the pockets of university administrators. And in vocational schooling, paying for results has a compelling track record just in the last decade.
In 2014 Texas aligned incentives and funding for its technical colleges and started paying the schools based on how much the students earned. They can fake graduation rates, they can fake teaching skills, but they cannot fake the results: income. This approach resulted in a doubling of the total amount of money being made by students in just six years — money that goes back into Texas through local taxes. When bureaucrats have a strong financial incentive to deliver better results, they will.
Instead of rewarding the programs that run up the most debt, we’d reward the programs that run up the most income. Because without carrots and sticks — in the form of increased and decreased funding proportionate to results — the system lacks the positive incentive to change itself. The beautiful thing about rewarding competence through income is that schools would have a natural incentive to figure out where the future income will be — and to partner with companies to focus on the right skills.
We already spend tens of billions nationally on federal job training programs with little accountability or vision every year — nearly 50 federal programs that spend a total of $20 billion annually. Most of them have been funded for generations without regard to which ones are better than others. Which ones improve incomes and economic prospects, and which ones don’t? My proposal here is to spend much less — $5 billion per year in public money, with the option for private matching — and to spend all of it accountably. Not one dollar in public money for a program unless it’s producing results that can’t be gamed.
Making the system accountable is free — but even so we’re not spending nearly enough on teaching the skills that our country needs and our industries will pay for. The effect in the next decade would be inspiring to watch. The worst programs would be shuttered, and the successful programs would expand with public capital. And the United States would regain its industrial base and competitive footing with our most skilled peers.
7. For $200 billion, create better funders of science in America.
The National Institutes of Health is a scientific behemoth. Nearly every medical researcher in the U.S. depends on it for sponsorship. It doles out over $50 billion in grants every year. It has done great things for the US, but today, it desperately needs some competition.
When institutions get big, they are pulled in all different directions by different interests: the politicians, the activists, the corporate special interests, the press, the lawyers, etc. Sometimes the pull is in the right direction, by committed veterans of the institution and cause. And sometimes it is not. At the NIH, even the great scientists are constrained by a culture of risk aversion that develops when many constituencies are involved, it’s impossible to please everyone, and priorities are unclear.
In some smaller entities, we see better incentive structures. The Damon Runyon Cancer Research Foundation operates with about 1/1000th of the NIH budget, but is widely respected in the bioscience world because of its clear mission: to elevate new scientists that will work on cancer their entire careers, and give those same scientists decision power in selecting and funding the next generation. It’s a novel structure, but not especially complicated. Yet it rewards high-risk research over the course of a long career, and allows the best to select the next. The bureaucracies favor research tied to special interests, favors for lawmakers, and tangential social goals.
The problem is not bureaucracy or bureaucrats per se; someone is going to have to administer money, somehow. The problem is that the NIH bureaucracy is a top-down organization, where senior leaders (who are often there for 40-50 years) have a monopoly on the direction and process. They are often not active researchers themselves, but are assimilated members of Washington, D.C. political life, replete with political games and virtue signaling. Bureaucracies need competition from the outside, and that’s exactly what Congress can do. 40-year NIH careers should make us wince, because the processes that drove science funding in 1990 might not be the right processes for today. And without competitors, it is difficult to see what is and isn’t working. The NIH and other federal funding organs have become slow and tired. In a very literal sense, the average age at which investigators receive an NIH grant is steadily increasing. Not since the early 1990s has the average or median age of a first NIH grant been below 40.
An improved public scientific funder would do a few things. It would explicitly reward risky research and superior research processes like at Damon Runyon; it would fund research gaps where innovation isn’t profitable; it would experiment with the funding itself to make it much more competitive and transparent; and it would crush all attempts at political influence.
Medical research gaps are areas where the results of research aren’t profitable — like generic drugs where a patent has expired. In the pharmaceutical industry, companies willingly finance research for lucrative drugs where the IP can be monetized. But the tragedy of the commons exists: for thousands of generic drugs that Americans use, nobody has a strong incentive to do large-scale research on them, despite their ubiquity. For example: peptide treatments are common in physical therapy. There are hundreds in development, dozens in use, and an utter lack of research because they aren’t profitable. Tens of thousands of physical therapists prescribe peptides like BPC-157 and we don’t have authoritative studies on their efficacy. That is a huge research gap where public money would go a long way.
As for experimental funding models, there are hundreds of ways we could mix up funding mechanisms to test what works better. We could hold votes on NIH grants, and allow thousands of practicing physicians to vote. Physical therapists, chiropractors, and dentists could vote on what they want to see funded in their areas. It would be the start of a bottom-up revolution in American research, which is dominated by the top-down approach favored by the cartel of medical school leaders and D.C. bureaucrats.
Even in basic research — without specific applications in mind — we can encourage more deliberate risk taking, and an emphasis on finding young geniuses so that progress doesn’t stagnate. For $200 billion over ten years we can upend our Soviet research model with a new NIH competitor with competitive frameworks. At the end of the decade we’ll have a new science of science.
8. For $100 billion, upend the energy future and put de-growthers out of business
How do we already spend a trillion? On energy. U.S. energy expenditures topped $1.3 trillion in 2021. Just counting electricity and natural gas — i.e. not gasoline and jet fuel — it’s about $600 billion. And $1 trillion is also the approximate amount of “energy spending” in the 2022 “Inflation Reduction Act,” most of it focused on green energy subsidies.
Since 1990, nuclear energy has represented a steady 20% of U.S. energy production with relatively little major investment. That output is from systems that were designed, permitted, and constructed in the 50s, 60s, and 70s under the Atomic Energy Commission. That commission had a dual mandate: to protect the public, and to improve the public welfare and strengthen free competition in private enterprise by enabling and promoting the development of nuclear energy.
When the Nuclear Regulatory Commission was created in 1975, Congress dropped the all-important second part of the mandate, and the NRC’s mandate is limited just to protecting public health, and protecting the environment. And it turns out (who could have guessed?) that the best way to fulfill this negatively-framed mandate was to stop nuclear development altogether, focus on extracting fees from the existing players, and coast along for decades.
For over 40 years, the NRC succeeded in that obstruction. In 2020, the Commission approved the first new nuclear design in its 45-year history. The Department of Energy couldn’t help but brag about the “historic” nature of the moment. “The 12,000-page application took less than 42 months to review,” wrote the department, referring to the NuScale Small Modular Reactor (SMR).
For reference, this is a graph of cumulative nuclear permits and operable reactors, with the formation of the NRC marked, which precipitated the flatline in nuclear construction.

With a regulatory body like the NRC in charge of nuclear, it’s easy to see why investment interest has waned — with a 0% success rate in bringing new nuclear technology to market. So how would we go about spending $100 billion with such people in charge?
We could start by abolishing the NRC’s awful incentive structure — conceived as a cost-saving measure, but which has backfired awfully. Congress forces the NRC to fund its budget through fees paid hourly by the very companies it regulates, not unlike a law firm or consultancy. If you were funded to regulate by the hour, how long would you take?
Instead of imposing those $1 billion dollars a year on companies trying to develop new nuclear plants, we could fund the agency properly and incentivize it to increase power production. That’s $10 billion over ten years. That public spending would probably free $10 billion in private capital over ten years to develop these systems. If properly augmented with incentives and accountability for the commission — a new mandate to increase clean nuclear production — it would unlock hundreds of billions of private capital.
Some of my liberty-oriented friends would stop here — and some wouldn’t have started this little thought experiment at all. But in the spirit of counting all smart perspectives, I’ll continue with another $90 billion to close the loop on energy.
There is huge international support for reducing carbon emissions. That includes many de-growthers with sinister political motives, who want to rewind the clock on human progress, reduce the global population, and make those who remain a lot poorer. But the green coalition also includes a lot of optimistic technologists who aren’t civilization dismantlers. In this plan, we work with them. In laws like the “Inflation Reduction Act,” we implicitly value one metric ton of carbon dioxide in the hundreds of dollars — as high as $1,000 in certain instances for specific subsidies. Without any IRA, the US was projected to reduce carbon emissions by 24-35% by 2030. With the IRA, the projections are a 31-44% reduction — within the range of what might have already happened. In other words, the real projected effect of the $400 billion in subsidies averages out to about a 10% reduction by 2030. That implicitly values every ton of carbon at hundreds of dollars — far above what it should be.
In the smallest tranche of money in the IRA, our government allocates just $5 billion for carbon capture and storage payments. The law provides payment of $85 per ton stored, and $180 per ton permanently removed. These figures are high. With the right technology we could do wholesale removal for just tens of dollars per ton. These numbers should be set by competition, not by fiat. We should pay for the cheaper, better product, not fix a price.
We can produce so much energy that we’ll have nothing to do with the excess but use it to suck carbon dioxide out of the air, and guarantee payment for it. A ten-year guarantee would provide investment clarity for the mass-scaling of infrastructure. And when the cost to run these systems inevitably plummets, we could revisit the subsidies. But right now, our energy grid barely keeps up and certain leaders are focused on reducing consumption. That is the worst of both worlds. Turning those incentives around — cheap energy for cheap carbon capture — is the most free-market way to deal with this complex issue.
Even those who don’t believe what the green coalition says about the future would be winners, because everyone would have abundant energy and a green solution that doesn’t set us back a century. We can call it non-communist environmentalism.
9. For $100 Billion, Give Back the Rest of the Money
And now we’re at the end of the road. So far it looks like we have $100 billion left in the $1 trillion budget. My bias, as I noted earlier, is simply to give the money back to people. If it were put up for a vote, would Americans rather have their own money to allocate — or have central planners do it? So, let’s give it back and let citizens do with it what they will. And the truth is that if we spent money as suggested above, it would create trillions in economic growth.
As entrepreneurs, we look for gaps between how the world currently works and how it could work with better technologies and processes. Right now, one of the most extraordinary gaps is the gap between how the middle and working classes in America live, and how they could. In all the areas above, dysfunction and incompetence are like weights on our national potential. Simply put, hundreds of millions of people could be doing much, much better. In many cases, these gaps will be solved by innovative businesses that reduce the burdens on people’s lives. But some things can only be fixed by fixing public institutions and structures.
At the beginning we imagined the shrieking of bureaucrats as they tell you what you aren’t allowed to do with money. Chief among those things is giving it back to people. If it must happen, they call it a “stimulus payment” or a “tax rebate” — in order to imply the money was never ours in the first place. But it is our money — and maybe if our leaders acted more like it, they’d spend all the other money better, too.