Are Americans Financially Illiterate?

A recent article posted on Before its news states:

Recently the National Bureau of Economic Research (NBER) released a report showing that the average person does not have the financial literacy required to navigate the modern economy. The only positive thing I can say about this exercise in discovering the obvious is that it wasted private and not taxpayer dollars.

It goes on to state that financial literacy has actually improved in the United States since the 1970s, but cites the educational system as a lesser obstacle in wide spread financial literacy, though I have to disagree. I feel it is a huge obstacle

Unfortunately, the futility associated with our elementary/high-school paradigm is the least of the barriers to the public becoming financially literate. There is the cultural phenomenon of extending childhood well into the twenties. There can be no expectation of financial literacy when the little animals are segregated from the real world for longer and longer periods, now approaching twenty years

Most of the Kids I come in contact with have no understanding of finance whatsoever, and that is just as TPTB intend. If we can begin to "re-educate" or children to how the world works, rather than teach feel-good propaganda from history "textbooks" we may stand a chance after all.

Ill end this post with a quote from Henry Ford.

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

reply to post by Lono1


Sadly, yes. In lieu of a second line, I'd like to add that innovations in "finance" (ie; creative accounting) have advanced faster than even the experts can follow.

I graduated HS in the early 90's..the only "class" (instruction) into finance was a fake checkbook for the semester and learning how to balance that checkbook. I learned nothing about credit cards (unfortunately..) nothing about student loan debt, nothing about the stock market..NOTHING.

I am pretty dumb when it comes to finance. The only thing I know for sure is the money comes in a lot SLOWER and goes out at the speed of light.

I graduated in '01 and the only thing I learned from my Economics class was how to invest in the stock market. Just as another poster has stated, I learned nothing about credit cards, predatory lending, debt, or anything like that. I had to learn many of those things the hard way.

So yes, I think Americans are financially and lawfully illiterate.

We home school all of our kids now.. and home schoolers have a lot more access to materials to actually teach your kids finance and etc. The schools definitely do NOT, if anything they glorify the gross consumerism that is killing us all. If you can, public schooled kids or not, get the materials ( much of it free and online.. printable resources) and teach the kids yourself. No one else will!

I would love to get 15 min. on a MSM show to see if I could get a straight answer to one question. SInce Nixon took us off the gold standard in 1971, what is a dollar worth?

Originally posted by VictorVonDoom
I would love to get 15 min. on a MSM show to see if I could get a straight answer to one question. SInce Nixon took us off the gold standard in 1971, what is a dollar worth?

Nothing at all or a negative. Its probably a deficit to even add ink to the material that makes up our currency. (/sarcasm.. I think)

I think it is more a case of the economy and financial planning being more complicated than most anyone can truly understand. Even the highly educated economists and money managers are wrong a large portion of the time. After all it is pretty imposssible to create accurate scenarios for the valuation of various investments over time. Changing a variable by 1% can mean 50% too much or too little money at the end of the road. There simply is no right way. You either take a low rate of interest which keeps your dollars constant but won't keep up with the cost of living and likely won't provide what you need, or you take more risk and hope that that added risk will do a number on inflation and give you the financial security you desire. One path is the right path going forward but I don't believe the wisest wall street trader or economists could acrtually tell which it was with more than 50% certainty. Asking people to be financial literate in this time is like asking then if red or black will come up on the next spin. Don't blame the people, it truly is not their fault as there currently is no such thing as financial literacy. it cannot exist in the current system. Whether done accidently or by design, thats where we stand.

If we want people up on their finances we need to give them more of a constant to factor into their decisions. How about long term fixed rates on both loans and savings. Adjust the economy and eliminate inflation by simply reining in or loosening the leverage banks are allowed to use.

Originally posted by Lono1

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

I have to agree with this one, if people will get off their favorite "reality show" and look into the "realities of what government is doing to us" they will be rioting and asking for the government officials head in every state of the nation.

But sadly that is why we are inundate by propaganda, every thing is fine, government is working for us, but they forget to add that, they are robbing the hard working America blind and at the same time they are enriching their pockets.

Nothing to see here just cast your vote and wag your flag.

reply to post by marg6043


Sports, propaganda, tv programs, propaganda, everyone is interested in things that don't matter.

What a world we live in...

Originally posted by Lono1
Are Americans Financially Illiterate?

Can you be illiterate to something that is fake in the first place?

Money is an illusion, based on nothing and continues to exist on faith alone.

Ignorant is a better word to use than illiterate.

reply to post by zroth


Very well put. Star to you.

I, too, learned nothing of our financial system in school.

It seems that the point the article cited by the OP was making is that until people have to confront using the financial system, they have no compelling reason to learn about it.

Curious statistic I just heard on the radio: 10% of the adults in Seattle don't have a bank account.

My parents opened a bank account for me when I was a young teenager. I made money at odd jobs and saved some of it. By the time I left home I had about $4,000 saved.

But that doesn't mean that I was financially literate!

I was asked by my church to help with bookkeeping, and in this way I learned more about it. Our founder was also keen to make us more aware of the subject, and particularly how the fractional reserve setup worked in the US. So I ended up getting more education than the average. Had no bearing on my ability to make money though!

I was raised by college-educated parents. But their parents weren't all college-educated. So I learned an odd mixture of things from my family that had no particular alignment with any particular dogmas, though they did claim to be "liberals"

I got the impression while still a teenager that we were generally, as a society, "illiterate" about a lot of things. For example, after all these years, we still didn't know how to bring peace to a relationship, a household, a business, a school, a courtroom, a corporation, a city, a country or a planet. That seemed pretty illiterate to me!

It's one thing to be schooled, and quite another thing to be effective. The "financial literacy" idea is just grasping at straws. It has very little to do with the root problems that we urgently need to handle.

reply to post by l_e_cox


Yes, I believe there are urgent issues that we need to address. Number one among them is the fact that we should put no faith in government to teach our children the knowledge that they need to navigate in this world. All public school does is propagandize our kids from the first day they set foot on campus.

While purely academic classes such as language and basic level mathematics run little risk (although I have argued with many a teacher for disagreeing with me on the "algebraic" process I use to get to a 'correct' answer) of being mis-taught due to personal bias, quantum physics clearly states that there is no description of reality that is accurate unless it includes the variables (observer/means of observing/observers location in space/time) into its description.

There is no position from which real reality can bee seen, it is all abstracted by different interpretations.

So, that being said, the argument comes full circle, back to a point where the main question is still:

do you feel comfortable with strangers instilling a foreign belief system to your progeny?

Having children, the protection of those children, and the education of those children is just one other aspect of our lives, that the government has no business interfering with, but we invite and allow them to anyway, because of sloth, distraction, abuse, or outright neglect...

Of course our kids are financially illiterate. Of course they are historically illiterate. Of course they are easy to manipulate. They are manipulated by the system from kindergarten through High School. Even Universities have their own specific political tilt, that has nothing to do whatsoever with the parents values, unless the parent guides and directs the children as good parents do.

Education, by Don Berg:

The definition of education in common usage, that education is merely the delivery of knowledge, skills and information from teachers to students, is inadequate to capture what is really important about being and becoming educated. The proper definition of education is the process of becoming an educated person. Being an educated person means you have access to optimal states of mind regardless of the situation you are in. You are able to perceive accurately, think clearly and act effectively to achieve self-selected goals and aspirations. Education is a process of cognitive cartography, mapping your experiences and finding a variety of reliable routes to optimal states when you find yourself in non-optimal states. The idea that the definition of education is the delivery of knowledge, skills and information from teachers to students is misguided.

Indoctrination:

indoctrination in·doc·tri·nate (n-dktr-nt) tr.v.
in·doc·tri·nat·ed, in·doc·tri·nat·ing, in·doc·tri·nates
1. To instruct in a body of doctrine or principles.
2. To imbue with a partisan or ideological point of view: a generation of children who had been indoctrinated against the values of their parents.
in·doctri·nation n.
The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2009.
Published by Houghton Mifflin Company. All rights reserved.

Thesaurus: Synonyms

indoctrination - teaching someone to accept doctrines uncritically
brainwashing - forcible indoctrination into a new set of attitudes and beliefs inculcation, ingraining, instilling - teaching or impressing upon the mind by frequent instruction or repetition

Its all in the language. No doublespeak or euphemisms, no political correctness... just words for what they actually mean.