I just saw Michael Bloomberg give an impressive interview on Meet The Press.  I think he is well informed, and also realistic in what we need to do, including improving the education system we have here in the US.  He spoke of the auto industry having reduced employment from 500,000 to 250,000 people.  To give this some perspective, that’s the equivalent of five baseball stadiums, sold out,  filled with fans- and none of them has a job any longer.

We can’t afford NOT to teach our kids about money and economics from the earliest points in elementary school.  We need to have every American understand that just because a bank offers you a loan or credit card, doesn’t mean that’s a good decision for you.  You have to be able to say no.  You have to understand how to balance your checkbook, how to make and stay within a budget, and how to save for a rainy day, or even several rainy days.

I remember a few years ago when we were looking for a house, how much of a mortgage my real estate agent and banker said we could afford, and being determined that we stay well below that amount.  Why?  because after paying my mortgage and taxes, I wanted to be able to take a vacation with my family, pay for college for my kids, and still eat.  This meant making a reasonable selection, not a maximum selection, of what we could afford.  We could have bought a bigger house, but we didn’t need it- more to upkeep, more to pay for, and foreclosed us from making other decisions.

It’s not always easy to exercise constraint.  It is easy to whip out a VISA and buy whatever you want in the moment, rather than consider whether, in the big picture, this is a wise idea.  So we generally operate under the rule that says if you can’t afford to buy it in cash, you shouldn’t charge it.  This should be true whatever the purchase is, save emergencies, like failure of the water heater, or a car repair.

There’s an old saying- those with the gold make the rules.  Bankers have the money, and you get some of it by agreeing to their rules, but you don’t HAVE to take the money.  You can say no.  Politicians don’t stand up to Wall Street because those same people give them money to fund their campaigns.  Campaign finance is as much of a problem in this Wall Street mess as anything else.

But the real failure here is not teaching people about economics, about saving, about being financially independent and by deferring gratification until they can afford it.  We absolutely must let our kids know how money works, how to save, and how to be self-reliant.  People will sell you anything, but only you can determine whether or not it’s a good deal for you.