Here's an opportunity for the Obama Administration to employ a long-term fix to one of the root causes of our current economic quagmire. The Secretary of Education should seriously explore the idea that federal educational funding for high schools include a requirement that all graduating students successfully complete a financial literacy course.
Of course, this is not a new idea. Teaching financial literacy on a wide-spread basis has been a subject of discussion for decades. But except in some limited cases, the most advanced economy in the world (or so we thought) failed to actually train young adults about how to balance check accounts, understand the difference between stocks and bonds and navigate the world of credit...including mortgages. In no small measure, the current mega recession is an unintended consequence of a massive educational failure that turned a blind eye to teaching young Americans about the economy.
While this concept is not new, the opportunity to actually do something about it is fresh as Washington re-thinks its eduction policy. Perhaps the most important thing we can do for future generations is to start educating our young and theirs about how our economy works, on a macro and micro level, starting with personal finance.
When I graduated high school, I could not balance a check book. My eyes glazed over at the sight of a stock table in the local newspaper. I took it on blind faith that whatever that small print was when I signed my first mortgage obligation would be "okay." It's taken a long time to catch up. Today, students who will ultimately be asked to pay down the unthinkable budget deficit with their blood, sweat and tears will need to understand on-line banking and complicated money programs to get into housing and establish and preserve that intangible commodity called credit. Some, as entrepreneurs and business owners, will need to comprehend what it means to establish a budget and navigate simple but essential accounting and tax concepts. This is not something to be put off. Our high schools should assist in this challenge.
While there are resources on the Internet that address this deep pocket issue, we need an established educational curriculum across all fifty states that has the discipline of actually engaging students in financial education. This is as important as secondary school math classes and should not be voluntary.
No, not everyone who attends such a course will get it. But for those that will, the payoff for them and the national economy will be limitless. Smarter financial consumers will equal a more secure economy. Think of where we might be right now if financial literacy was a main staple of our educational system for the past 50 years. You can count on it...we'd be a lot better off.