A Plan for Preserving America's Fiscal Future

Dear Mr. President,

A new CNN/ORC poll finds that only 44% of Americans believe the country will be doing well in the next year. Two years ago, 63% believed a better future lay ahead.

Plenty has changed in that time, but anger at those who govern America's financial system probably has a lot to do with it. From the Occupy Wall Street movement to the MF Global mess and a growing body of evidence that Congress is stealing from common shareholders, free-market capitalism has rarely looked so fragile. Your job, sir, is to restore lost confidence. I think it can be done, but only if you're willing to take a page from the scouting movement.

That's right, Mr. President. I'm asking you to become a Boy Scout.

A basic truth about personal finance
See, it's easy to blame partisanship, cronyism, greed, stupidity, stubbornness, or any of a dozen other human foibles for the failure of a Congressional supercommittee to strike a crucial budget deal. Name a fiscal crisis and chances are you'll find evidence of the same sins at work.

What we don't talk about -- or when we do talk about it, we do so in hushed tones -- is the stark truth that too many of us have learned money lessons the hard way because of a lack of financial education at home and in school. Are mounting fiscal deficits really so surprising when you consider that the most recent 2008 survey of the Jump$tart Coalition for Personal Financial Literacy found that American high school students scored just 48.3% on its test of basic money knowledge?

Students who don't know money basics are more likely to grow up to be among the estimated 50.2 million American households carrying some credit card debt. Their tally? An average of $15,729 owed -- enough to buy a good used car. The children of these borrowers are the ones who will be called upon to tackle our nation's toughest fiscal problems.

Let's make them Eagle Scouts
We can and should prepare them better. The Scouts certainly are. What the education system lacks, both the Boy and Girl Scouts are making up for with comprehensive programs that result in merit badges awarded for financial study.

Each program is different. The Girl Scouts have three levels of financial literacy training for young girls all the way to young adults. Everything from budgeting to comparison-shopping to financing college is covered for those motivated to win their financial freedom.

The Boy Scouts are equally comprehensive under the purview of a "Personal Management" merit badge. Here's a sampling of the 10 requirements:

  • Prepare a budget reflecting your expected income (allowance, gifts, wages), expenses, and savings. Track your actual income, expenses, and savings for 13 consecutive weeks.
  • Explain the concepts of return on investment and risk.
  • Select five publicly traded stocks from the business section of the newspaper. Explain to your merit badge counselor the importance of the following information for each stock: current price, how much the price changed from the previous day, the 52-week high and 52-week low prices.
  • Explain what a loan is, what interest is, and how the annual percentage rate measures the true cost of a loan.

Judging by the results of Jump$tart's survey, there's precious little understanding of any of these concepts among American youth. Can you imagine future legislators so ill-prepared?

A better prescription for an ailing America
And that's only half the story. Monied interests spend millions in lobbying annually to argue for and against legislation that has a deep impact on the financial markets and therefore the retirement hopes of millions of Americans. The specific figures are startling.

According to OpenSecrets.org, the finance, insurance, and real estate industry was the second-biggest spender on lobbying over the past 13 years. In that sector, securities and investment firms have put up $74.8 million this year alone, with Blackstone Group (NYS: BX) , Goldman Sachs (NYS: GS) , Fidelity, and Morgan Stanley (NYS: MS) among the biggest spenders. Within the industry, only the insurance segment has put up more ($116.4 million as of this writing).

I have nothing against lobbying as a concept, sir. But if legislators can't argue the merits when powerful interests come calling -- interests such as CME Group (NAS: CME) , which has spent $1.875 million on lobbying this year only to face scrutiny because of $1.2 billion in missing money at MF Global -- then isn't it We the People who suffer?

As a nation we have to get smarter about finance. We can start by teaching our kids better. I urge you to consider pushing for more financial education in America's schools.

Thank you and Foolish best wishes,

Tim Beyers
Fool, Rule Breaker, and Dad to three great school-age kids

Interested in staying up to date on the emerging efforts to enact Wall Street reform? Shoot a blank email to imoscovitz@fool.com.

At the time this article was published Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.Motley Fool newsletter services have recommended buying shares of Goldman Sachs. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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