A kilogram of that mortgage

[SwordsMaster]

Hi all,

Perusing the webternets, I found this piece of writing (http://freakonomics.blogs.nytimes.com/2008/07/21/are-we-a-nation-of-financial-illiterates/), which I think explains the financial crisis better than any of the things that have come out of CNN or whathaveyou. Please discuss.



Let’s begin with two questions:

1. Do you consider yourself financially literate?
2. If so, how did you get that way?
And now, a third question:

3. How important is widespread financial literacy to the health of a modern society?



Do you think this is scary? I believe so. Do you think people who cannot choose their mortgage should be allowed to choose the next US president? I do not think so.

[CountArach]

Do you think this is scary? I believe so. Do you think people who cannot choose their mortgage should be allowed to choose the next US president? I do not think so.
Why not?

[SwordsMaster]

Why not?

Obviously, if they cannot figure out what economic policy is best for themselves, on a small scale, how can they be qualified to choose a candidate whose economic policies will affect not only them, but everyone, and quite possibly for more than one generation?

[woad&fangs]

Cool, another Freakonomics reader:medievalcheers:

I'm not to worried about it. As it said in the article, the US actually beats most European countries on financial literacy.

[Andres]

Obviously, if they cannot figure out what economic policy is best for themselves, on a small scale, how can they be qualified to choose a candidate whose economic policies will affect not only them, but everyone, and quite possibly for more than one generation?

It's called "democracy" :shrug:

[yesdachi]

Isn’t the point of electing someone to represent us that we trust them to know how to steer our ship into the future and not into ruin. Although I did get all 3 of the questions right I still wouldn’t trust myself with the nation’s checking account but I will vote for the person I think will do the best job at steering our ship.

Interesting article, the parts about what kids learn in school about finance is worthy of a laugh. There is no way a kid should learn calculus before they learn the basics of home finance. But IMO our education system is one of the most broken systems in the US so I may be a little negative on the subject. ~D

[SwordsMaster]

Yes, but those a re very basic questions. You said yourself, that you wouldn't know what to do with the nation's budget, but you can, at the least discern what the budget is. How can someone who doesn't know how interest rates work be allowed to elect a person in charge of inflation, unemployment, and currency stability? What grounds is the decision based on if they don't know what the conversation is about?

This is how the wives' buttercookies are so damn important. Everyone is qualified to have an opinion on those. Should buttercookie politics decide elections?

[naut]

Wow, I impressed myself and got all three right, but then again I'd hope so since I'm doing a Business course at Uni which envolves Economics, Accounting and Finance. :laugh4:

It is scary, and it is very frequent, so many people get into bad debt, or get loans to play off loans and simply don't understand the basics of budgeting or money management.


Interesting article, the parts about what kids learn in school about finance is worthy of a laugh. There is no way a kid should learn calculus before they learn the basics of home finance. But IMO our education system is one of the most broken systems in the US so I may be a little negative on the subject.
I've always disagreed with the idea of making school vocational before liberal. The systems do require a decent level of economics yes, but the point of all those other subjects are to build skills. Maths isn't there so you always have trig and calculus on hand, its there to help you become more rational and logical. History builds up research and synthesis skills. Etcetera.

[yesdachi]

Yes, but those a re very basic questions. You said yourself, that you wouldn't know what to do with the nation's budget, but you can, at the least discern what the budget is. How can someone who doesn't know how interest rates work be allowed to elect a person in charge of inflation, unemployment, and currency stability? What grounds is the decision based on if they don't know what the conversation is about?

This is how the wives' buttercookies are so damn important. Everyone is qualified to have an opinion on those. Should buttercookie politics decide elections?

I agree and that brings me back to why I think our schools are broken. Of course we, as individuals, we have a certain amount of responsibility to keep ourselves informed and to keep learning about things impor… I’m sorry, where was I? I just heard that Britney was seen smoking near her children. Oh yah, learning about spending money or something.

Hey, if buttercookies were the deciding factor in elections it would explain the obesity issues in the US. Headline: New president elected, belts loosened. ~D

[atheotes]

Obviously, if they cannot figure out what economic policy is best for themselves, on a small scale, how can they be qualified to choose a candidate whose economic policies will affect not only them, but everyone, and quite possibly for more than one generation?


It's called "democracy" :shrug:

ahh... the pitfalls of democracy... need people to be informed and responsible for it to work well :wall: only if we could come up with a better system :thinking2:

[yesdachi]

Wow, I impressed myself and got all three right, but then again I'd hope so since I'm doing a Business course at Uni which envolves Economics, Accounting and Finance. :laugh4:

It is scary, and it is very frequent, so many people get into bad debt, or get loans to play off loans and simply don't understand the basics of budgeting or money management.


I've always disagreed with the idea of making school vocational before liberal. The systems do require a decent level of economics yes, but the point of all those other subjects are to build skills. Maths isn't there so you always have trig and calculus on hand, its there to help you become more rational and logical. History builds up research and synthesis skills. Etcetera.

Being liberal and philosophical thru school is great, learning to apply what you learn from one class to another unrelated class or a real world application is fantastic but if a kid graduates without a solid understanding of how everyday financial principals work is it really a surprise when they end up in a credit card mess or with a bad mortgage? Considering where we are economically (in the US at least) with massive credit card dept and crazy foreclosure rates I would have to think our education system has failed to produce adults that know how to act responsibility with their money.

Related side note: I have little sympathy for banks that are now struggling after giving loans to people that should have been considered high-risk.

[CountArach]

Obviously, if they cannot figure out what economic policy is best for themselves, on a small scale, how can they be qualified to choose a candidate whose economic policies will affect not only them, but everyone, and quite possibly for more than one generation?
But surely if they have this much difficulty then they can vote for someone who understands economic principles that are entirely beyond their grasp? You don't have to understand everything that a person says to vote for them - that would exclude everyone on this earth baring the politicians themselves. Besides, you don't just elect the person who you vote for, you get their advisors as well - people with degrees in various economic facets. Economics at the nation-wide level is vastly different from economics at the family level.