Why Schools Teach So Little About Inflation, Money Creation, and Currency Debasement (And What Parents Can Do)
Last Sunday night, I found my 16-year-old slouched across our kitchen table, frowning at his phone, a half-eaten chocolate chip cookie melting next to his handwritten savings spreadsheet. He works 20 hours a week at the downtown coffee shop, has for a year, and has been dead-set on buying a beat-up 2012 Toyota 4Runner he saw listed last spring. Back then, the seller wanted $10,500. Now the same dealer has a similar 4Runner—same year, same mileage, same wear—listed for $13,000, and my son can’t wrap his head around it. “It’s not new,” he said, poking cookie crumbs with a pencil. “Why’d it get $2500 more expensive in a year? My econ teacher never talked about this. We spent three weeks drawing supply and demand curves and never once said why everything just keeps getting more expensive.”
That question stuck with me. I remembered my own high school econ class, same gap: we talked about types of unemployment, the basics of the stock market, how to write a budget, but no one ever walked through why my parents’ $800 monthly mortgage for a three-bedroom house in the 1990s would be unheard of for that same home now. My sister Lila is a 10th grade social studies teacher at the local public high school, so I met her for coffee a couple days later and asked her why these topics barely get a mention.
She stirred her oat latte and pulled out her crumpled scope and sequence document for the district social studies curriculum, folding it in half to point out the half page allotted to “price changes.” “Most U.S. states don’t even require students take a full econ class to graduate,” she said. “Here, it’s a one-semester elective if you want it, and we have to hit 40 different state-mandated learning targets. That leaves basically no room for anything that isn’t on the end-of-course test.” The bigger issue, she explained, is that anything related to how money is created or why currency loses value gets tied up in political arguments. A few years back, a teacher at her school added a short lesson on post-recession Fed policy and got complaints from both sides of the aisle—one group said he was criticizing government spending, another said he was criticizing bank regulation, and admin just told everyone to stick to the pre-approved textbook to avoid trouble. Textbooks get approved by state committees, so they leave out any topic that could ruffle enough feathers to get the book rejected. On top of that, most current teachers never learned this stuff themselves when they were in school, so it’s not something they think to add even if they do have extra time. It’s not that teachers don’t care—it’s that the system is set up to avoid these topics.
That leaves the gap for parents to fill, and it doesn’t require an econ degree to do it. We’ve been doing little things over the past couple months that take 10 minutes here and there, no homework, no tests, and it’s stuck way better than any textbook lesson I remember.
Right after my son asked that question about the car, we did a quick exercise at that same kitchen table. He had $8,200 sitting in his regular savings account, earning 0.01% interest, like the bank told him to do. We pulled up the average inflation rate for the previous 12 months, and I showed him how to calculate the simple math: that his $8,200 would buy him about $350 less stuff a year from now, just because of inflation. No one had ever told him that your money loses value just sitting still. That day, we spent 15 minutes opening a high-yield savings account that pays 4.5% interest, which almost makes up for current inflation. He learned more in that 15 minutes about how inflation affects his own life than he did all semester in his high school econ class.
Another low-effort habit I’ve picked up: I save one annual grocery receipt in my email, so next time we’re picking up milk or cereal together, I can pull it up and compare. A dozen large eggs were $1.89 in 2019; last week they were $4.19. A loaf of sourdough was $3.29; now it’s $5.79. We talk about how this isn’t just the grocery chain jacking up prices for no reason—there’s more money circulating in the economy now than there was before the pandemic, so every dollar is worth a little less. When I explain money creation, I use our family as a simple example: if we wanted to throw a big birthday party for my grandma, and we only had $600 to spend, but we decided we needed $1000 worth of food and cake, and I just printed four extra $100 bills on my home printer to pay for it, that doesn’t create more food. It just makes each of the dollars we already have worth a little less. That’s all money creation is, on a much bigger national scale. Currency debasement is just that same process, happening over decades. My dad told me he bought a whole hamburger and fries for 35 cents when he was a teenager; that same meal is $12 now. That’s debasement, plain and simple.
You don’t need to get into the weeds on Fed policy or complicated economic theory to teach the basics. Kids deal with the effects of this every day when they’re saving for something they want, when they hear their parents talk about rent or gas prices. It’s way more relevant to their daily lives than a lot of the stuff that takes up space in the standard curriculum.
Of course, it’s not a perfect system. I’m not an econ expert, some nights I have to look up a question after my kid goes to bed and talk about it the next night. The school curriculum isn’t going to change any time soon—too many people have a stake in avoiding topics that can turn political. That means the gap gets filled at home, in little bits, during everyday moments.
Last week, my son texted me from work, said he was talking to his 19-year-old coworker who’s saving for a summer trip, and told her she shouldn’t leave all her money in her regular 0.01% savings account. That’s enough for me. It’s not a full college-level econ course, but it’s the stuff that will actually matter for their daily lives and long-term decisions. We’ll keep doing it, one 10-minute conversation at a time.
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