Are Americans Financially Illiterate?
The answer is yes. Most Americans do not have the financial understanding necessary to navigate the terms of their credit card agreement, and yet studies suggest it should stay that way. Lauren Willis of the Loyola Law School in Los Angeles recently wrote a controversial paper entitled “Against Financial Literacy Education” that suggests most people aren’t capable of keeping up with the complex and fast-changing regulations or metrics that drive our financial industry.
In it she states that attempts to financially educate people have been costly to the government and met with limited success, citing several cases in which test scores were lower among those who had received a financial education than those who hadn’t. She further argues that financial education tends to increase the confidence of the consumer, but fails to increase their ability to make good financial decisions. Willis believes that financial matters should be left to experts rather than individual consumers, much like the fields of law and medicine.
What do you think? Let us know in the comments.