As consumer prices continue to rise, experts now warn of a looming recesssion brought about by pandemic manufacturing slowdowns and supply-chain shortages. Economists explain it as a classic case of demand outpacing availability –– with scarcity making things more costly. Unfortunately, the painful solution now being launched will raise borrowing costs rates so that people spend less. While these measures may or may not improve the overall economomy, the combined effects of inflation and rising interest rates will exact a double blow to people struggling to make ends meet. In such an atmosphere it becomes critical to help people manage their own finances and to prevent the broader economy from overheating.
This is where consumer education and financial literacy can help as part of a larger move toward a “learning society.” For some time now, economists have been promoting financial education in public schools and urging people to become more resourceful. Time Magazine reported polls showing “99 percent of adults in agreement that personal finance should be taught in high school.”[i] The Federal Reserve argued that “financial literacy and consumer education, coupled with strong consumer protections, make the financial marketplace ‘effective and efficient’ and assists consumers in making better choices.”[ii] Many colleges and universities have started making financial literacy courses graduation requirements. And for some it has worked, as many Americans “put their own budgets under the microscope ––akin to what financial analysts routinely do when the scrutinize companies.”[iii] Continue reading “The Learning Society”