who have to focus on survival because of inadequate management of their finances are unable to
contribute fully to the economy.143 Significantly, “[o]ur country loses valuable human capital as
Americans, who struggle for daily financial survival, are unable to pursue higher education or
focus their talents on innovation, entrepreneurship and intellectual contributions to the nation’s
progress.”144 Essentially, financial illiteracy not only generates economic crises, it can also stifle
economic progress by diverting the resources necessary to develop America’s youth to engage
competitively in the global economy. This means that families may be stuck in poverty for
generations.145 Unfortunately, higher education still eludes many American families,146 which
also indicates the necessity for the introduction of financial education at a young age through the
public school system. Without such early exposure, the nation loses valuable human capital that
could be generated by incredibly intelligent and inventive people who are instead wrapped up in
their struggle for financial survival.147 If America hopes to remain competitive in the increasingly
global world it must figure out how to harness its talent. Part of doing this is ensuring talented
youths can propel themselves into a position to contribute to the economy and not be hamstrung
by poor personal financial skills.148
The Great Recession is a clear example of how financial illiteracy generates economic
instability.149 Financial illiteracy also hinders talented Americans from fully focusing their talents
on contributing to the economy in the form of skilled labor, innovation, entrepreneurship, and
investment.150 Additionally, economic stability is critical to America’s national security.151 The
economy is the “foundation” for all government-run programs including the armed forces and the
Department of Homeland Security.152 Government officials recognized the growing financial
143 See PRESIDENT’S ADVISOR Y COUNCIL ON FIN. CAPABILI TY, supra note 4.
145 See id. at 3 (“Low- and moderate-income families, minority householders, and certain persistently under-resourced communities
are likely lacking knowledge, experience and access to share with the next generation.”). See generally KIYOSAKI & LECHTER, supra
note 1 (explaining that poverty is often transgenerational).
146 WILLIAM J. HUSSAR & TABITHA M. BAILEY, NAT’L CTR. FOR EDUC. STATISTICS, PROJECTIONS OF EDUCATION STATISTICS TO
2021: FORTIETH EDITION 19-23 (Jan. 2013), http://nces.ed.gov/pubs2013/2013008.pdf. While the percentage of students enrolled in
college is steadily increasing, segments of the population lag behind, particularly Asian/Pacific Islanders, American Indian/Alaska
Natives, African-Americans and Hispanics. Id.
147 See PRESIDENT’S ADVISOR Y COUNCIL ON FIN. CAPABILI TY, supra note 4.
148 Exec. Order No. 13455, 73 Fed. Reg. 4445 (Jan. 22, 2008).
By the authority vested in me as President by the Constitution and the laws of the United States of America and
to promote and enhance financial literacy among the American people, it is hereby ordered as follows:
Section 1. Policy. To help keep America competitive and assist the American people in understanding and
addressing financial matters, it is the policy of the Federal Government to encourage financial literacy among
the American people.
149 Financial Literacy Hearing, supra note 23.
150 PRESIDENT’S ADVISORY COUNCIL ON FIN. CAPABILITY, supra note 4.
151 Walter Pincus, Keys to National Security Start with The Economy, Group Says, WASH. POST
(Apr. 13, 2010), http://www.washingtonpost.com/wp-dyn/content/article/2010/04/12/AR2010041203959.html.
Their assignment: Come up with a national security strategy for the United States. So a group of 15 military
officers and government employees at the Industrial College of the Armed Forces studied the issue for months -
- and decided that, first, consideration had to be given to the economy, which they found is heading toward
disaster, even as the recession eases.
The economy, the Seminar 11 group agreed in its report last month, is ‘the foundation for everything else.’
With the nation’s yearly deficits running at about $1 trillion and the national debt expected to more than double
by 2020, the group -- whose members included U.S. Army, Navy and Air Force officers; civilians from the
State Department, Pentagon and U.S. Agency for International Development; and a Mexican Navy officer --
decided that tough actions should be taken beginning next year.