A federal government that is $15.6 trillion in debt is currently using its “bully pulpit” to run 16 different programs to teach citizens “financial literacy,” according to the Government Accountability Office, the accounting agency of the U.S. Congress.
Previously, relying on a study by the RAND Corporation, the GAO had reported that the federal government operated 56 programs to teach citizens “financial literacy.” However, it subsequently determined that 16 was a better count of what it called the government’s “significant financial literacy programs.”
Even among these 16 federal programs that teach citizens “financial literacy,” the GAO found that there is some duplication of efforts and no definitive way to measure the programs’ effectiveness.
The GAO said it held a forum last year where people concluded that the federal government enjoyed a unique “bully pulpit” from which it could preach to citizens about handling their money.
“At our forum last year on financial literacy, many participants said that the federal government had a unique role to play in promoting greater financial capability,” Alicia Puente Cackley, the GAO’s director of financial markets and community investment’ told a subcommittee of the Senate Homeland Security Committee in written testimony submitted Thursday. “They noted that the federal government has a built-in ‘bully pulpit’ that can be used to draw attention to this issue.”
At the close of business the day before the GAO submitted this testimony, the federal debt stood at $15,623,285,528,454.41, according to the U.S. Treasury. In its latest Monthly Budget Report, released on April 6, the Congressional Budget Office said the federal government ran a deficit of $777 billion in just the first six months of fiscal 2012 (October 2011-March 2012).
“In prior work, we cited a 2009 report that had identified 56 federal financial literacy programs among 20 agencies,” the GAO told the subcommittee. “That report, conducted by the RAND Corporation, was based on a survey that had asked federal agencies to self-identify their financial literacy efforts. However, our subsequent analysis of these 56 programs found that there was a high degree of inconsistency in how different agencies defined financial literacy programs or efforts and whether they counted related efforts as one or multiple programs. We believe that our count of 16 significant federal financial literacy programs or activities and 4 housing counseling programs is based on a more consistent set of criteria.”
The GAO testimony indicated there were some questions about the efficiency of the federal government efforts to educate Americans on handling their own money efficiently.
“In our recent and ongoing work, we have found instances in which multiple agencies or programs share similar goals and activities, which raises questions about the efficiency of some federal financial literacy efforts,” said the testimony. “For example, four federal agencies and one government-chartered nonprofit corporation provide or support various forms of housing counseling to consumers—DOD, HUD, the Department of Veterans Affairs, the Department of the Treasury, and NeighborWorks America.”
The GAO testimony also described for the subcommittee the difficulty in discerning whether the financial literacy programs were effective.
“In prior work we have noted the importance of program evaluation and the need to focus federal financial literacy efforts on initiatives that work,” said the GAO testimony. “Relatively few evidence-based evaluations of financial literacy programs have been conducted, limiting what is known about which specific methods and strategies are most effective.”