In the past week a suggestion has come forward that Hoosier schoolchildren should be educated in financial matters. Specific mention was given to loans, mortgages and credit cards.
Although the idea has merit, it is ironic coming from the Indiana General Assembly, that body of superior knowledge when it comes to finances. A basic course in economics, incorporating elements of personal and public finance, would be my recommendation.
How many members of our esteemed legislature understand the fundamentals of financing government when they first run for office? OK, they learn something over time, but their unelected fellow citizens remain ignorant.
We want our children, our citizens, to be able to manage their affairs well. That’s why legislators make these enlightened proposals. Yet, balancing a checkbook with a bank statement is nothing more than simple addition and subtraction.
What is more complex is the civic purpose of alternative financing methods; government is not a business.
What services should be provided by government? Which level of government: federal, state or local? At the same time we have to decide whether “provided” means operated and financed by government.
An ice rink can be owned by a local government, built and operated by a private company, and financed through bonds and fees paid for by households using the rink.
Our statewide debate over school finance is a good example of confusion about what we expect from our schools and how we think they should be financed and operated. Public financing and private operation is the voucher model, based on the belief that private operation is always more efficient and effective than public operation.
These are the issues that a course in economics should cover along with the concepts of borrowing that were not appreciated by the timid souls who put together our current state constitution.
Thus, we live in Indiana, where the state government may not go into debt, but its cities, towns, counties, school corporations, universities, etc. may and must borrow to be viable.
Equally important as teaching young people about credit card debt is teaching them about music and art. In truth, music and art education may be more important than teaching personal finance.
Desire and necessity, the emotional counterparts of demand and supply, will teach what one needs to know about credit cards. But music and art involve perceptions that must be cultivated.
Credit cards are just contemporary instruments of commerce. In less than a generation they may be discovered by children in attics as today they find rationing coupons.
Beethoven’s music has survived more than 200 years because its structure and beauty continue to delight the ear. Ancient works of art still command our attention because they have balance and precision we have learned to appreciate.
Side-by-side with the efforts to strengthen Indiana’s economy, we need to recognize the imperative of improving our cultural stimulation. For too long, we have been satisfied with pockets of elegance in coarse country clothing.
A grand symphony orchestra should not be struggling in Indianapolis. The sounds of great music should be heard throughout the state. This is a matter for the legislature to address through its education powers as well as its purse strings.
Just as we have a college credit on the income tax, valid cultural organizations should be granted similar positive treatment.
Morton Marcus is an economist, formerly with the Indiana University Kelley School of Business.