Every citizen needs to be able to read, write and...and, "what else?" Each of us has a favorite list of "what else." Without getting into everything on my own list—and there is a lot—let me focus on basic economics knowledge. The Federal Reserve has a vested interest in furthering the public's understanding of economics. One important way we are reaching a young audience is through the Fed Challenge competition. My personal involvement with this program has given me an appreciation of what a great opportunity Fed Challenge is because it reaches people during their formative high school years.
Why is economic education so important? To live independently, a person must know the basics of how to earn and spend money. The large number of personal bankruptcies in today's economy provides clear evidence that there is a need to educate young people about the basics of household financial management. Day in and day out, our democracy decides issues concerning government taxes and spending. These are also money issues—more precisely, resource-use issues. Almost all government regulations and controls have an economic purpose or, at a minimum, an economic impact. How can citizens and their representatives vote wisely on these matters without knowing a little economics? They can't.
I know that an important element of our society's success is the depth of the economics understanding of our citizens. I also know that the economic education plate is piled high with unfinished business. Economics can be intimidating, and it may sit on the plate untouched like overcooked broccoli (my apologies to broccoli lovers). Fed Challenge is an innovative way to turn that broccoli into a student's favorite vegetable. This program is one of the ways—the most exciting way, I think—we at the Fed are working to educate young people about economics.