JPF Home Page Forums Stop The Bailout

It takes two people to make a bad credit decision. One is the person who uses the credit, but one is the person who was GIVEN the credit. Finance education is abysmal in the United States. Absolutely terrible. I don't know a single person my age who cares half as much about I do about portfolio diversification, saving money, ROI, CDs, etc. It's pathetic. But you cannot blame the individual for that because they are not being taught properly.

Let's look at it another way. Just a few years ago, the nation's savings rate was so bad it was actually NEGATIVE. In other words, on the whole, people were actually taking money out of their overall savings every year. Credit card debt has spiraled out of control as well. People just don't know how to handle them. Somebody in my own family at one point had so much credit card debt that they needed to be "bailed out" by somebody else in my family. This person in my family who had all that debt was not stupid or senseless. They just hadn't been taught the proper skills of money and credit management.

If everyone was being properly educated about finance and STILL messed up, I would be less sympathetic. But this is simply not the case.

Brian, do you believe in consumer protection laws? For example, requirements made by the government for food manufacturers to include nutritional information on their product. It's illegal to make a candy bar and sell it with text saying "mail us for the nutrition information" (unless it's a little fun-size bar, but that doesn't count - the manufacturer assumes that the person who bought the bag, which does have the information, is disseminating it properly.) In New York City, restaurants like McDonalds have to prominently display calorie and fat information for their products.

Should we repeal these laws? In a perfect world, everybody would be perfectly educated about nutrition and the menus of each company. But we don't live in a perfect world.

Finance is no different. If you actually try to look at all the terms and agreements associated with just opening a free checking account, you'd see that you practically have to be a lawyer to understand the terminology. People would prefer to just trust the media, popular culture, and word-of-mouth when making financial decisions. Obviously, this is a bad idea, but on the whole they lack the background necessary to actually understand what they're getting involved in. I recently heard about a credit card agreement that was in excess of 500 pages long. How can any normal person be expected to comprehend such an agreement and its potential impact on their decisions?