Without an understanding of economics, individuals are more likely to fall prey to fraud and credit abuse and exercise poor judgment on such important decisions as home buying, college savings, car financing, and retirement planning. Misunderstanding of the nature of markets may lead to such ill-conceived responses to price increases as price controls that have the opposite of the intended effect, creating shortages and exacerbating price pressures. Failure to understand the nature of competition and the need to build a strong human and physical capital base may lead to measures to protect a few jobs while denying the broad-based benefits of trade.

Certainly the earlier these economic literacy skills can be learned, the better. Good habits are best formed before bad behaviors can take root. In a world where credit cards are easily obtained and credit card debt is rampant, it is never too early to learn. In addition, the economic way of thinking is a multipurpose tool with not only a wealth of practical, real-world applications but benefits as well, even for the very young child, in terms of augmenting critical thinking skills. Furthermore, the earlier an individual learns such principles as the time value of money, the sooner he or she can take advantage of compounding his or her savings and building assets for the future.

Science, technology, and economics are complements. While science and innovation determine what is technically possible, economics determines what is feasible and efficient--or what the best use of the resources consumed by competing technologies will be. This efficient use of technology drives productivity, and productivity helps drive growth and improve living standards.

A well-functioning economy demands an educated workforce capable of making sound decisions. To absorb the inevitable shocks, an economy also requires smoothly functioning markets, both for goods and for the financial instruments that facilitate their production. Pools of saving and sound investment decisions are necessary to direct financial resources to support the most productive innovations. On an individual basis, the informed person is better able to plan, budget, and weather his or her own financial uncertainties. The individual is also more likely to save and invest and less liable to fall victim to financial fraud and abuse.

Today's complex issues require the use of sophisticated tools. Economic literacy has a toolset that empowers users to take back control over their lives.

Bibliography:

1) National Council on Economic Education. 1997. Voluntary National Content Standards in Economics. New York: National Council on Economic Education.

2) National Council on Economic Education. 2006. What Economics Is About: Understanding the Basics of Our Economic System. New York: National Council on Economic Education.

3) Saunders, Phillip and June Gilliard, eds. 1995. A Framework for Teaching Basic Economic Concepts: With Scope and Sequence Guidelines, K-12. New York: National Council on Economic Education.

4) Watts, Michael. 2006. What Works: A Review of Research on Outcomes and Effective Program Delivery in Precollege Economic Education. New York: National Council on Economic Education.

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