Today the Senate passed HB 1980 to "increase the financial literacy of public school students in our state".
A good concept. But the Democrats in Olympia would have more credibility on this issue if they increased their own financial literacy first.
Posted by Stefan Sharkansky at April 10, 2007 11:53 AM | Email ThisI've seen the internal financial documents of some of these lenders, and their profits are not exorbitant. They take-on financial risks banks and credit unions simply wouldn't touch.
Probably what is called for mostly here is personal resopnsibility. The "progressive" tends to ignore personal responsibility and would prefer to substitute government intervention instead. Welcome to the nanny state.
Posted by: Libertarian on April 10, 2007 12:18 PMFinancial Literacy 101:
Good Morning Children.
*When you have a group of buyers and sellers that are free of regulation, that's called an open market.
Price changes based on supply and demand. That is supply of good and services and demand for those goods and services. If your service is in high demand and/ or limited supply, the price goes up. Conversely, if there is an abundant supply, or not enough demand, price goes down.
*So if you want to kill a market, what you do is artificially lower the price of what it costs to make or do something. This will temporarily lower the price, and create demand, but in the long run, it will kill the market, because the true cost to create something must be born by someone. This is called a subsidy.
*You can also achieve the same effects by government regulation. In this scenario, the government uses the threat of force to artificially influence the market and lower price, or restrict supply. This also kills markets, because artificial conditions created by government do not reflect the actual market.
*Another great way to kill a market, is to fail to address very high expense costs. Expense costs are those that you must pay monthly to keep your business in the market. One great way to keep your expenses too high, is to hire labor that has forcefully negotiated their pay rate, rather than allow it to be set by the free market. Force may allow those employees to charge a higher rate, but ultimately, it will drive business elsewhere, and or out of existence. Usually high cost labor is the result of collective bargaining, also known as unions. Unions use collective force to negotiate pay, betting that a business owner and his investors would rather continue to exist and pay the high costs than shutdown.
*The Market = Financial Reality. Hundreds of people wishing, and plenty of Government Subsidy and Regulation does not change reality. It might bend financial behavior, but the underlying reality will play out regardless.
*If you really want to have financial literacy, do the opposite of what you see government doing.
*And above all kids, don't look for a job, a handout, or for anyone else to provide for you, instead look for a need or service that is not being met, and then be the one to fill it. This will make you successful, and when you are successful you will be proud of your achievements, and when you are proud of your achievements, you will be happy.
*If you take handouts, or depress your own creative desires, or wait for the government or someone else to provide for you, that is the sure path to failure and unhappiness.
Class dismissed.
Posted by: Jeff B. on April 10, 2007 01:29 PMYou used too many common terms that could be easily understood by almost anyone. This would never pass any kind of government legislation.
Posted by: Ken on April 10, 2007 02:17 PMThe national debt is about 62.4% of GDP, which is only slightly higher than during Clinton's time. But this is nowhere near the record.
In 1944 the National debt was 122% of GDP to pay for the war. It wasn't until 1956 that it cam below 70% again. And those were "the good ole days".
It was down to 32.5% in 1981 at the end of Carter's administration, but you also need to look at the inflation at that time (double digits) to realize that the national debt can't be the single source of information to look at.
Let's take the economy. During most of Clinton's years (and GHW Bush) the economy was booming. It started to decline in 1998 and by 2000 was in a recession due to an over inflated economy based on tech stocks. We are now in a robust economy with low unemployment figures.
I'm sure you knew all of this though. If not, maybe you can take that financial 101 class the legislature is talking about.
Posted by: Ken on April 10, 2007 03:35 PM