Chairman Ben Bernanke told a group of educators on Thursday that today’s contemporary kid will surely have it better in his adulthood than his parents have right now. The key, he says, is a commitment to ensure our young people are well educated and especially in financial matters. He went so far as to encourage educators to introduce economics or other similar financial classes to kids at the middle school level.
Speaking to the group at a town hall meeting, he said,
My best guess is that our kids will be better off than we are.
He gave credit to the massive technological advances over the past two decades as well as the ones we’ve yet to discover. He also cited committed colleges, a society that encourages entrepreneurship and “an efficient market-based economy, and a diverse workforce” as leading factors for his optimism.
He also spoke about the many challenges those same young people are sure to face. He reiterated the importance of instilling solid money habits into kids and says it’s never too early to begin those efforts. He said,
If you think about what adults are required to do each day, economics and financial literacy are critical.
A few of the specifics he mentioned included had to evaluate student loans and the intricacies that define them, where to turn for credible and accurate financial advice before making mistake and understanding that financial education is a “lifelong undertaking”.
He then went on to lend his support for adding economics and personal finance courses to school curriculum. He said there were several ways this could be accomplished, but made mention of Advanced Placement classes that really ensure a solid understanding of everything from bank runs to financial crises, subprime mortgages, recessions and the role of the Fed. Understanding how monetary and fiscal policy work is also important and said he realized these were “complex issues” but says that teachers could find a way to make it work so that students can better understand various current events:
Financial education supports not only individual well-being, but also the economic health of our nation. As the recent financial crisis illustrates, consumers who can make informed decisions about financial products and services not only serve their own best interests…but they also help promote broader economic stability. Smart financial planning–such as budgeting, saving for emergencies, and preparing for retirement–can help households enjoy better lives….(and) financial education can play a key role in getting to these outcomes.
Perhaps one of the more interesting nuances is the flow of the conversation. As one observer said,
The meeting kept veering away from financial education for the nation’s young people and instead was focusing on things like the Euro crisis. These educators that the perfect expert in front of them.
After fielding questions, the last question focused on how to get kids excited about saving money, especially with rates being so low. Bernanke delved into why the interest rates were low and that the nation’s economy is steadily improving. He encouraged the teachers to focus on keeping their students focused on the big picture.