We need a better educated and informed citizenry about the basics of finance. That much is clear.
Mortgage debt, fiscal deficits, monetary policy, student loan debt and guarantees, credit card debt, contingent debt, taxes, government spending, investments, private versus public sector productivity, free choice and how markets work in comparison to monoplies are all good topics. Of course, there are countless others as well.
But who will teach the teachers how to teach the financial lessons, and what will the teachers be taught to teach?
Bernanke: Financial education key for nation makes the case for all Americans knowing much more about the basics of finance and our personal financial situations in order to make informed decisions related thereto.
In fact, it's a vital necessity that our citizens become much better informed about their, as well as our nation's, financial condition.
Had we known more about income in relation to debt and its potentially disastrous effects before the housing bubble burst, we wouldn't be experiencing the very painful economic debacle underway today. Student loans may be the next crisis for our young Americans.
Here's the advice offered by the Fed Chairman to a group of teachers Tuesday in Washington:
"Financial education is important not to individual well-being but also
to the nation's economic health, Federal Reserve Bank Chairman Ben
Bernanke said Tuesday. "As the recent financial crisis illustrates,
consumers who can make informed decisions about financial products and
services not only serve their own best interests, but, collectively,
they also help promote broader economic stability," Bernanke said in
remarks for a Teacher Town Hall at the central bank's headquarters.
Teachers need to pass along the essential skills and concepts that
students will require to make major financial choices, he said. If
students understand that it is important to shop around for a loan to
get the lowest interest rate, to review fees and how to contact
financial advisers, they are more likely to make good decisions, he
Bernanke did not discuss the economic outlook or monetary policy."
We'll go into greater detail about all of this later.
But at least the conversation may be beginning and that's a good thing.