United States Senator Daniel K. Akaka (D-Hawaii) introduced legislation to improve the education of American students in economics–one of nine core subject areas listed in Goals 2000. The Excellence in Economic Education Act would increase students' economic knowledge, strengthen teachers' ability to teach economics, encourage research to increase economic understanding and instruction, help States incorporate economics in school curricula, and promote public and private partnerships to support economic education.

The bill strengthens the National Council on Economic Education (NCEE) network by providing funds (1) to NCEE for use in its national efforts and (2) to state councils and centers through NCEE for use in activities such as teacher training programs, resource dissemination to school districts wanting to incorporate economics into curricula, evaluations of the impact of economic education on students, related research, school-based student activities, and student and teacher exchanges. The Akaka measure provides funding and flexibility to promote economic education for students in elementary and high schools.

The National Council on Economic Education is the only organization in the country with a concerted, national effort to combat economic illiteracy. Since its founding 50 years ago, the council has existed as a unique partnership of business, education, and labor. The council is present in nearly every state through a network of state economic education councils and centers for economic education. It also works to promote economic literacy abroad through international exchange programs.

The bill is supported by the Hawaii Council on Economic Education and Center for Economic Education, based at the University of Hawaii at Manoa. Both the council and center would receive support under the measure.

"We must work to ensure that all Americans can make informed economic and financial decisions for themselves and their families, and improved economic education is key to this effort," Senator Akaka noted. "This must start with training from a young age on basics such as the importance of saving and investing, consequences of powerful domestic and international economic changes, and the meaning of 'bankruptcy' and 'profit.' Fighting economic illiteracy is essential to ensuring a well-educated citizenry."

The results of a basic economics test given around the country underscore the need for increased economic literacy for all Americans: half of the adults and two-thirds of the high school students who took the test received failing scores. More than half demonstrated that they did not understand fundamental economic concepts such as scarcity of resources and inflation. Given nationally to 1010 adults and 1085 high school students by the National Council on Economic Education, test results show that:

• half of adults and two-thirds of high school students failed, while only six percent of adults and three percent of high school students got an A;

• on average, adults received a grade of 57 percent and high school students a grade of 48 percent;

• students and adults alike lack a basic understanding about the concepts of money, inflation and scarcity of resources–core economic concepts;

• a sizeable number of students (35 percent) admit that they simply do not know what the effect of an increase in interest rates would be; and

• only a little over half of adults (54 percent) and less than one in four students (23 percent) know that a budget deficit occurs when the federal government's expenditures exceed its revenues for that year.

While these results were dismal, it was also found that a full 96 percent believe basic economics should be taught in high school. Currently, 38 states have adopted guidelines for teaching economics in their schools, but only 13 states go as far as requiring that students take an economics course in order to graduate.

"In the richest country in the world, we must do better to educate our young people about how to manage their resources, prepare for the workforce, make wise investments, and become informed citizens about public policy," Akaka observed. "We must especially help young Americans understand what lies ahead of them in their retirement years and give them the tools to prepare for a secure financial future."

The Excellence in Economic Education Act is cosponsored by Senators Thad Cochran (R-MS), Patty Murray (D-WA), Dan Inouye (D-HI), and Bob Kerrey (D-NE).

Anyone interested in seeing how they fare on this basic economics test, viewing the test results, or learning more about efforts being made to address economic illiteracy can view the National Council on Economic Education Web page at http://www.nationalcouncil.org/.