A View from Hawk Hill | With gov’t help, financial planners for all

The other day while I was hitting the pavement I kept thinking about three seemingly unrelated things: The recently increased media coverage of Philadelphia’s poverty, the middle class and the jobless soon-to-be graduating seniors. All three groups are witnessing unique and very different struggles.  However, these outwardly opposite groups may have more in common than one would think.

The local newspapers have been riddled with stories of poverty, middle class distress, and education inequality in the recent weeks.  Philadelphia has been pegged as unhealthy, violent, poor, and broke.  A visitor reading the morning newspaper in a comfortable Center City hotel probably cannot believe these truths as he gazes out upon the beautifully groomed Rittenhouse Square.  However, by nightfall, even this location shows signs of Philadelphia’s distress as the homeless resort to sleeping on benches previously occupied during the day by Philadelphia’s elite.

The Inquirer’s Karen Heller coined poverty as “Philadelphia’s problem”. Many cities, especially during this recession, could rightfully take this title as well.

However, I would argue that poverty is not the main cause of problems in Philadelphia or elsewhere. The poor, the increasingly disenchanted and jobless middle class, the failing financial institutions, the bailed-out industries, and the climbing government deficit all have a stake in the true problem—mismanagement of money.  It is a cyclical problem that every city, state, and institution owns.

We simply do not teach our children or ourselves fiscal responsibility.  Only those rich enough to afford financial planners reap the benefits of monetary knowledge and security.  Everyone else is left to navigate the trials of monthly budgets, tax forms, and retirement plans. It’s pretty apparent we lack any type of true fiscal knowledge as a country when the head of our Treasury department failed to pay his social security and Medicare taxes for several years. 

Keeping this in mind, it is important to acknowledge that the recent economic crisis trickled up, not down.  Americans mismanaged their money and took out loans they could not afford from banks who showed no restraint or care for individuals.  Next, businesses and corporations followed suit and the banks funded them, too.  Now, the government is digging itself into its own hole to help others out of theirs. 

The middle class may need money from the government right now, but what they need in the future is education and guidance regarding finances.  This should not be a right exclusively for the elite.  Let’s face it.  Social Security is going to run out. Realistically, government-issued personal savings accounts are not going to help if we don’t learn about personal finance.

This is where the thousands of college graduates with degrees in accounting, finance, and economics may help.  These bright minds will be graduating in the coming years, many of them without jobs.

What if the government created a division which employed those bright jobless minds from the financial sector to offer financial services to the millions of Americans who cannot afford this luxury?  The number of financially unsure Americans outweighs the number of those without health insurance.  The government could require small businesses and corporations alike either the option of providing their own financial counseling through a private company or participating in the government version.  Not only would this system help manage America’s money, it would teach and instill personal responsibility regarding money. 

Undoubtedly, the debate of public versus private coverage would occur but benefits of this system could be huge. Americans would understand how to manage their money, smart investments would be made, employment would increase, and an overall sense of responsibility, beginning with individuals and trickling up to government, could happen.  By properly saving and perhaps investing hard earned money, a college education, home mortgages, and many other luxuries previously allocated to the upper class could become realities for the masses.

It is pretty obvious this plan seems exclusive to the middle class.  It is easy to forget about those in poverty incapable of even getting a job, let alone a government-provided financial advisor. Before we can even take one step towards broadening the government’s scope to include finance training, we need figure out a way break the nasty cycle of poverty within communities.  This problem seems a lot harder to deal with than America’s deficit of finance knowledge.  Perhaps this is why the poor are left out of almost every conversation regarding money and finance. 

We have a lot of problems on our hands. Mismanagement of money is the largest issue America faces today.  It has alienated millions of poor people, millions of jobless middle class Americans, and millions of citizens who now mistrust government spending. Perhaps if the government leads by example, we can begin to uncover and fix the problems of those who have been plagued by the system’s massive failure.