Public finances put into personal terms
2 September 2009 by Christopher SuleskeThese findings underscore the importance of beginning the learning process as early as possible. Indeed, in many respects, improving basic financial education at the elementary and secondary school level is essential to providing a foundation for financial literacy that can help prevent younger people from making poor financial decisions that can take years to overcome. In particular, it has been my experience that competency in mathematics–both in numerical manipulation and in understanding its conceptual foundations–enhances a person’s ability to handle the more ambiguous and qualitative relationships that dominate our day-to-day financial decisionmaking. For example, through an understanding of compounding interest, one can appreciate the cumulative benefit of routine saving. Similarly, learning how to conduct research in a library or on the Internet helps one find information to evaluate decisions. Focusing on improving fundamental mathematic and problem-solving skills can develop knowledgeable consumers who can take full advantage of the sophisticated financial services offered in an ever-changing marketplace.
Testimony of Chairman Alan Greenspan – Financial literacy
Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate
February 5, 2002
Financial literacy among Americans today is no better than in 2002, and one could argue far worse. There are undoubtedly multiple reasons for this, but Greenspan’s assertion that education is lacking is quite reasonable. I will ask my wife, an elementary school teacher of 10 years, to address this specific issue at a later date. 
I have long thought that what is needed in the public discourse concerning the nation’s finances is someone of prominence to effectively communicate the nation’s finances in terms of personal finances. That is, relate very personally the way the governments handle our wealth.
Finance geeks such as Greenspan, though respected, are not effective communicators at the popular level. They are seen as almost other-worldly in today’s predominant culture. They are expected to advise our representatives, politicians, who are in turn expected to serve us as a bridge of sorts. At least, those are my expectations – perhaps out of line with reality.
The current slate of political types are especially ill-equipped to perform this function for two reasons:
- They are self-interested in perpetuating (and expanding) the methods of the status quo.
- They are in many ways ignorant of basic economic principals due to a number of reasons, including immense personal wealth and a belief that somehow governments operate apart from such economic fundamentals.
It’s this last point that is most salient, for in the case of politicians and the public, it is the blind leading the blind.
There are some exceptions to the assertion that politicians are unwilling or unable to communicate financial matters in personal terms. Ron Paul & Paul Ryan come to mind. There was Ross Perot, the erstwhile Presidential candidate. But none of these seems to have the platform or mastery of communication to present the material in a way the average American can understand. Of those with the platform and the ability to effectively communicate, I’m thinking Barack Obama and Ronald Reagan. Obama is among the aforementioned group which does not wish to educate the populace so as to equate public and private finances, as it would undermine his agenda. Reagan, well, he is unavailable.
Here’s the way I see it. First the figures:
- U.S. GDP = $14,035,087,719,298.20
- U.S. Median Annual Household Income (2007) = $50,233.00
- U.S. Total Public Debt (2009) = $8,000,000,000,000 (57% of GDP)
- Projected U.S. Total Public Debt (2019) = $17,300,000,000,000 (82% of GDP)
- Projected U.S. Median Annual Household Income (2019) = $61,233.75 (2% annual increase)
- Projected U.S. GDP (2019) = $21,097,560,975,609.80
- U.S. Federal Budget Deficit (2008) = $459,000,000,000
- U.S. Federal Budget Deficit (2009) = $1,850,000,000,000
- U.S. Federal Budget (2008) = $2,979,000,000,000
- U.S. Federal Budget (2009) =
So, in personal terms