In a consumption society, the 2008 credit failure has altered the spending habits of all Americans including the death of mega consumption economy, which accounts for 70% of Gross Domestic Product (GDP). The collapse in property prices, job market collapse, and the collapse in the stock market were catastrophic to the finances of the consumer. The banks are being an advocate of immediate profits in lieu of the moral responsibility to the economic literacy and health of the community. Banks provided easy money, no win loan products, and services to rake in fee income. Banks are regrouping from credit losses and the tightening of existing credit in closing or reduction on credit cards, equity lines, and business credit lines and issuance of new credit to all borrowers including creditworthy business and consumers. The tide of easy money is not available in the post crisis world. The consequence of a post debt gorge is consumer whose are debt rich and savings poor. The attitude on finance is a contributing factor to the current economic mess in America.
Since the onset of 1980, American high school students were graduating to attend college with classes in Calculus, Physics, Chemistry, and Foreign Languages. The exclusion of personal finance and relationship management classes as is a cataclysm in the current failure to teach the two most fundamental skills to be successful in an American economy. The current education system believes sex education is paramount to teach children about the impact of sex in life, but personal finance has a higher impact in consequence. Education leadership has strong passions about allowing sexual education in the classroom. Where is the passion over financial literacy in the school system? The cost of forgoing the education process in personal finance and relationship management is a consequence of creating a financial destitute and servitude society where poverty, starvation, and economic collapse are inevitable. What benefit are condoms when financial ruin is across the land?
As a result, the missing financial curriculum in education is not penalizing one segment or portion of the middle class demographic. The consumer is unaware of the legal rights and protection available under the federal and state regulatory structure of the financial system. The result is the consumer who has been the dutiful steward of account management, savings, and borrowing to provide a balance to be financially secure in everyday life, but this consumer is human with life events beyond control including identity theft, divorce, and bank errors. What is a consumer to do without any advocate in a partner to inform and assist in this matter? The advocate and partner being the banking industry, and the current relationship vacuum are producing dire consequences for all consumers, communities, and the real economy.
In conclusion, this article is the first in a series of articles about the loss of freedom from the unethical practices of banks, fragmented regulatory structure, and the lack of financial literacy in the public American society. The current system does span social classes to negatively impact even individuals of high net worth and prime-credit scores.
- America’s crisis point in financial literacy (donny-wise.com)
- Rapid reaction via TARP diverts collapse at the cost of accountability (donny-wise.com)
- Giving Back (ally.com)
- Financial Literacy (habitatmb.wordpress.com)
- The Institute for Financial Literacy Releases Schedule for the 2012 Annual Conference on Financial Education (prweb.com)
- Making the Case For Financial Literacy (financialfuturesnow.com)