Financial illiteracy in America and economic crises

Tuesday, July 22, 2008

Is the United States a nation with a fundamental misunderstanding of debt, financing and budgeting? "Freakonomics" author Stephen Dubner and a number of economics say it is. Dubner looks at how an absence of financial education hurts us during times of economic instability.
Guest: Stephen Dubner, Takeaway contributor and author of the "Freakonomics" book and blog

Contributors:

Stephen J. Dubner

Comments [3]

jean-marc Boussefa from Arlington, VA

I think there's a great confusion between education & financial literacy. People get educated (often high level of education) but they still don't understand the difference between asset, liability & income producing asset. It is really about knowing FICO but understanding opportunity & exit strategy

Feb. 26 2011 03:41 PM
jean-marc Boussefa

I think there's a great confusion between education & financial literacy. People get educated (often high level of education) but they still don't understand the difference between asset, liability & income producing asset. It is really about knowing FICO but understand opportunity & exit strategy

Feb. 26 2011 03:40 PM
Ann Graham

Do you think companies like Fair Isaac, which created the FICO score, should do more to support financial literacy. How many people know what a FICO score is. Has professor Lusardi studied that.

I was amazed to see a full page chart on the history of credit cards in this country, in a the major front page New York Times on Sunday about America's Debt woes, that does not even mention the FICO score.

One could argue that FICO score enable the bankers to feed the minimum payment balance problem where banks get rich and consumers get poor. But if we were all more financially literate the FICO score could be a tool to improve our financial health. I am writing a book about this, and before I started writing it I didn't know what a FICO score was.

Jul. 22 2008 07:56 AM

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