Financial literacy organizations aim to teach young people about finance and credit before they get into debt. Transcript of radio broadcast:
09 April 2009
This is the VOA Special English Economics Report.
April is National Financial Literacy Month in the United States. As the country faces a deep recession, Americans are paying closer attention to personal finance. Some critics partly blame the crisis on Americans’ low savings rate and high personal debt.
But efforts to increase financial knowledge have grown in the last ten years. Government, community and business leaders have pushed for teaching young people about the importance of saving, budgets and the true cost of credit.
The Jump$tart Coalition for Personal Financial Literacy is based in Washington, D.C. It is an organization of about one hundred eighty groups, government agencies and businesses. Its goal is to provide financial knowledge to children and young adults before they get into debt.
Jump$tart’s Executive Director Laura Levine says many young people misuse credit cards without meaning to. She says they often start by making the lowest payment required. Over time, their credit limit is increased, but they do not pay off their debt. Laura Levine says young people can take on more debt than they can deal with.
The government says forty-five percent of college students have credit card debt. The average amount owed is more than three thousand dollars.
High credit limits are especially dangerous for college students. John Ninfo is a bankruptcy judge in Rochester, New York. He started the Credit Abuse Resistance Education Program.
It provides resources on its Web site for parents, teachers and students about financial issues. Judge Ninfo says he often sees people in their late twenties seeking bankruptcy protection in court. He says the combination of credit card debt and big student loans is burying young people in debt and driving many of them to bankruptcy.
The results of bad credit can be serious. Seventy percent of employers look at the credit histories of job candidates. In some fields, like law enforcement, bad credit means you cannot get a job.
Former President George Bush formed the President’s Advisory Council on Financial Literacy last year. That group has called for students at all grade levels to receive financial education.Currently, only seventeen states require personal finance to be taught at least as part of other courses.
And that’s the VOA Special English Economics Report, written by Mario Ritter. Transcripts and archives are at voaspecialenglish.com. I’m Steve Ember.
American officials say they will publish results on May fourth from a special examination of banks. The purpose was to see if the country’s nineteen largest banks could survive losses in the event that the recession got even worse.
The Obama administration announced the so-called stress tests in February as part of efforts to rebuild the trust of investors. If banks are told they need more capital, they will have six months to raise the money from private markets or the government.
Some experts think banks have seen the worst of their losses and that the worst of the financial crisis may already have passed. On Thursday JPMorgan Chase rep
JPMorgan Chase is among banks that have reported strong results
orted more than two billion dollars in profit for the first three months of this year. That was better than expected. Earlier, Goldman Sachs and Wells Fargo also reported strong results.
But the same is not true for the housing market. The Commerce Department reported Thursday that the building of new homes fell in March to the second-lowest level on record.
President Obama warned in a speech on Tuesday that economic pain will continue through this year and that losses of jobs and homes will not end soon.
BARACK OBAMA: “But from where we stand, for the very first time, we are beginning to see glimmers of hope.”
The president suggested that the economy could have reached the beginnings of a recovery.
One sign is that the Standard & Poor’s list of five hundred stocks has risen more than twenty-five percent in the past five weeks. The S&P hit a twelve-year low in early March. Financial stocks have had some of the largest gains.
All nineteen banks are expected to pass the stress tests. But how the results will be presented is not clear. There is debate over whether releasing too much information might cause more harm than good. Some people might rush to withdraw money from weaker banks.
Yet some small banks have already paid back aid from the government.
The eight largest banks in the country have received about one hundred sixty-five billion dollars in aid. Goldman Sachs received ten billion last October from the Troubled Asset Relief Program. Now it wants to pay that back.
On Tuesday, the bank sold more than five billion dollars in common stock in an effort to pay back the government. That was a day after it announced better-than-expected earnings. By returning the aid, Goldman Sachs could free itself from government limits on pay for top employees.
And that’s the VOA Special English Economics Report, written by Mario Ritter. For more business news, go to voaspecialenglish.com.
The Jump$tart Coalition for Personal Financial Literacy is based in Washington, D.C. It is an organization of about one hundred eighty groups, government agencies and businesses. Its goal is to provide financial knowledge to children and young adults before they get into debt.
