"The legislation will authorize the Treasury to issue and market War Bonds to the American people," according to a Nelson press release.
"War bonds are a cost-effective way to reduce our dependence on foreign creditors and create an outlet for Americans to express their patriotism and support for our servicemembers and America's mission," Nelson said. "War bonds allow us to borrow from ourselves, rather than other countries."
"I believe that we need shared sacrifice and fiscal discipline in financing the war effort," he added. "I don't believe our first instinct should always be a rush to tax. The government has gone to great lengths to address the economic downturn and adding new taxes right now could undermine those efforts."
Critics say that Nelson's characterization of the advantages of war bonds is misleading.
"The problem with this logic is that bonds -- even war bonds -- aren't free money," said Salon's Alex Koppelman. "At some point, those who invested expect to be paid back, and with interest. In order to accomplish that, the government has to use money it gets from...well, from tax dollars."
The "United States War Bonds Act of 2009" represents an alternative to the war tax proposal being pushed by Rep. David Obey, chairman of the House Appropriations Committee.
Nelson said the War Bonds Act follows the model of World War II savings bonds, which generated $54 billion between 1941 and 1945.
Last week, Sen. Joe Lieberman called war bonds "a great idea," as MSNBC notes, though he also said he was open to a war tax.
Americans can already buy Treasury bonds, which can be used to finance deficit spending.