What would be the economic impact of including financial literacy in America's public school curriculum?
Question:
I am not asking if it is possible to do this-- certainly a challenge-- but what would hapen to the markets if every person knew how they operated? If everyone invested at an early age in a moderate growth account of some kind (like a Roth IRA) we would have many more millionaires. Would this drive up inflation?
It is clear to me that there are several sources of poverty in America. And perhaps a way to solve much of the problem is to educate the masses to use their money wisely. A relatively small amount of money treated wisely can grow quite large over the course of 30 years. If we could truly do this-- how would poverty be affected in this country?
Understandably not everyone will chose to heed this advice, but what difference would it make if they were exposed to the ideas as children rather than as adults in their 30s or 40s?
Answer:
I like your idea. It won't usher in free market Utopia, but every little bit helps. In my opinion our 12 whole years of K-12 formal education accomplishes surprisingly little, so I'm sure this could be productively fit in -- maybe drop a few self-esteem classes to make room for it.
It's an interesting question as to the macroeconomic affect of more people participating competently in the markets. It would enhance economic productivity by making capital more available at lower cost for companies to invest. It would not cause general inflation if people gradually built up wealth over long periods of time, but might boost the consumer consumption part of GDP a bit.
Since people could afford to look after themselves in retirement, It could well solve the problems of social security and medicare -- allowing efficient market solutions to be used in place of inefficient government welfare.
The benefits of your idea are precisely why I support privatized social security.
You would breed a lot of accountants or bore the children to death.
Why only in America it should be taught in every country in the world especially the poorer one's typical self preservation mentality not that there's anything wrong with that it's a good idea!
You'd have less people stumbling around AnswersRoom.com shrieking that business is evil.
The most productive thing people can do with extra money is to invest it in their own education, a home, and their children's education. Only when you have enough to do this does it make sense to consider the stock market. This is what most people do, if they do not spend everything the earn as fast as they earn it. What people lack is not financial knowledge, but the discipline to forgo present gratification for long term goals. An additional problem is a significant part of our population does not have any extra income after providing for a basic standard of living because the failure of wages, in many jobs, to keep up with inflation. Telling students about the job market, and the pay scales for various occupations would probably be more useful. The knowledge needed to open a on line account and buy stocks or even better ETF's or mutual funds is easy to get once you manage to save the money.
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