Students at dozens of U.S. high schools participated last month in the first round of an international competition in economics. The top five American students will travel to Olympia, Greece, later this year to compete against students from other countries.
Richard Lorenc
The Economics Olympiad, as the competition is called, is challenging — especially for U.S. students, many of whom don’t study economics in high school.
Regrettably, economics is one of the academic subjects that has been downgraded in recent years as U.S. schools have leaned into the science, technology, engineering, math (STEM) disciplines.
The Department of Education’s National Assessment of Educational Progress periodically evaluates 12th-grade students. The last time it evaluated the economic literacy of 12th-graders was in 2012, when more than half (58%) of the 11,000 students tested didn’t qualify as “proficient.”
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Many of those 2012 students voted in their third presidential election last November. The economy was a key issue.
Just 27 states and the District of Columbia include some form of economics coursework as a high school graduation requirement. Many of these states approach it from a personal finance perspective — how to balance a checkbook, for example — rather than explaining economics as the study of how we peacefully transact and progress together.
Maybe that’s why so many government policies focus on so-called pocketbook issues affecting specific constituencies — college students, homeowners, people living on fixed incomes, the “working poor” — rather than on the conditions needed for a healthy economy.
Perhaps we’d have better policies if more policymakers understood economics, especially the fundamental lesson that everything has a cost.
Every decision an individual, business leader or public official makes opens some opportunities and closes others. What we choose is the sum of our evaluation of the choices we see as available to us. Over time, these choices compound, just like interest.
We must establish policies that consider the seen and unseen costs of a proposal, not just the immediately visible costs. The same is true for individual economic decisions.
The Federal Reserve Bank of New York recently reported that the total household debt in the United States, excluding mortgages, topped $4.9 trillion at the end of September. “Credit-card balances increased by $24 billion to hit $1.17 trillion, and auto loan balances saw an $18 billion increase and stood at $1.64 trillion.” Student loan balances also increased by $21 billion, ticking up to $1.61 trillion.
All of this red ink is the sum of millions of individual choices made over time.
And that’s just household debt. The federal government has more than $36 trillion in debt and counting, according to the Treasury Department.
The choices public officials make affect countless others. Government officials in California, for example, are expected to spend as much as $125 billion or more on high-speed rail — four times the original $33 billion estimate — rather than prioritizing water infrastructure. They made a conscious choice whose extraordinary costs are now sadly piling up.
Policymakers toss around incomprehensibly large numbers almost casually, just as they might discuss their golf handicaps.
This makes me wish that policymakers (and others among the intellectual elite) were far more literate in economics.
The STEM subjects are important, but science and technology can’t advance without an economy that can support them. That’s why economics should be considered a core high school subject.
Failure to teach American students key economic principles denies them the critical knowledge they need to make intelligent and responsible adult decisions. We see evidence of this every day as yesterday’s students make choices that shape the future.
STEM is important, but economics is destiny.
Lorenc is president of Certell Inc., a national education nonprofit that provides free education materials in economics and other subjects for high school students. He wrote this for InsideSources.com.
