Americans should grow up fiscally

A major reason why government has grown to the point where President Bush has submitted a record $2.57 trillion budget to Congress is that too many Americans have ceded personal responsibility to the state.

Most children expect to leave home and lead independent lives. Most parents expect them to do so. But government is the omniscient (not to mention omnipotent and omnipresent) parent that never kicks out the “children” no matter how old they get. Too many of the “kids” think it perfectly normal to have a permanent “allowance” and take no responsibility for their own lives or retirement.

While most people may believe intellectually that economic freedom is one of the greatest freedoms on earth, they display an appalling ignorance about the subject and how to achieve it.

A recent test given to thousands of high school seniors by the Jump$tart Coalition for Personal Financial Literacy revealed how early this ignorance begins. Only 6.1 percent scored a C or better on the financial literacy test, and the average score was 52.3, a failing grade.

My financial adviser, Ric Edelman, has been trying to get the nation’s attention through his books (like “The Truth About Money”) and his Web page www.ricedelman.com. I receive nothing of value for this plug!

Edelman thinks the time to start educating people about money is when they are children. He’s set up a retirement plan called the RIC-E-Trust that can provide retirement security. A $5,000 one-time tax-deferred investment at birth, with an average interest rate of 10 percent compounded, means that a child would have $2.4 million when he or she is 65 years old.

Who needs Social Security with that kind of nest egg? New York Times columnist David Brooks endorsed a similar (though less productive) idea, called KidSave, on Tuesday.

Edelman believes economic education begins with a child’s allowance and encouraging the child to save. He thinks kids should not be paid for taking out the trash or picking up their rooms, but they can be paid for “extra” jobs that are not part of living rent-free. They should not be overpaid, he says. That’s welfare and they won’t appreciate their first minimum wage job if it pays the same as or less than their allowance.

Good financial planning also means not choosing expensive colleges that saddle the graduate with a crushing debt. One can get a good education at less costly schools.

Jump$tart reports that only 19.5 percent of students say they are learning money-managing skills in school. Financial illiteracy has personal and national implications. It can leave the ignorant open to claims from politicians that have no basis in fact, as with the often-mentioned, but nonexistent, Social Security “trust fund” or the notion that there is only a fixed amount of wealth and if you make more than I, you must be punished with higher taxes to make it “fair.”

Wealth and wealth-building are regarded as evil today. The media and cultural elites treat large corporations as evil, though corporations provide jobs for millions and send millions of dollars in taxes to government.

My Dad taught me basic economic virtues such as thrift, generosity (with my money, not the government’s), self-control, honesty and personal responsibility. Not many teach these things today, or we wouldn’t have such enormous government budgets.

It is a sign of our collective economic ignorance that the president’s proposal for cutting just 150 wasteful and unneeded programs (many more could be cut) is drawing fierce opposition from Democrats and interest groups. In Washington, it is easier to drive a stake through the heart of a blood-sucking vampire than it is to kill off a money-sucking and useless government program.

The principles of a free market work if properly applied. It is best to learn them early and practice them always. I would love to hear the president say, “Why don’t you take care of yourself first and if all else fails, through no fault of your own, then come to government.”

That won’t happen because he would be labeled “insensitive” and “mean-spirited.” Sometimes people need a kick in the pants to get them to do what they would be doing if government weren’t there as a perpetual parent.