Debts you can’t pay

Do we teach economy the right way?

Today, I stumbled upon a revelation that left me reeling, all thanks to a spontaneous drive to my favorite berry farm. As I cruised along, a radio program about a summer camp for kids caught my ear. This wasn’t just any camp; it was called “BizTown,” where children aged 10–12 dived into the basics of economics in a hands-on, immersive experience.

The premise was simple yet fascinating: kids applied for jobs, went through interviews, and often landed positions in various businesses. They were tasked with building their enterprises from the ground up — after completing training on credit, debit, and the fundamentals of running a small business, of course.

But here’s the catch: where would these young entrepreneurs find the capital to launch their ventures? The answer was straightforward: the bank. They learned that to secure a loan, they needed a solid business plan backed by realistic numbers. The two competing banks in BizTown — KeyBank and a local credit union — were not merely focused on doling out loans. Instead, they prioritized the return on those loans, ensuring that the plans were robust enough to sustain a successful business.

As I listened, I found myself captivated by the dynamics. One of the bank CEOs even chased down a business that had submitted a flawed loan application, seeking clarification and correction before approving the loan. It was a testament to the real-world implications of accountability and precision in business. When the credit union CEO learned of this chase, he proudly declared he would have approved the loan on the first try — an ambitious mindset for a budding banker!

The kids, now running their bookshops, insurance agencies, restaurants, and home décor businesses, faced the dual challenge of making profits while repaying their loans. The journalist covering the camp remarked, “They are taught the basic elements of the capitalist economy of debt,” and I felt my jaw drop.

This was my epiphany. After living in America since 2004, I suddenly realized that I was entrenched in an economy built on debt rather than profit. It made sense why credit card debt was so pervasive — Americans are conditioned to believe that taking out loans and maintaining lines of credit is essential for economic growth.

My approach has always been different. I’d never take out a loan without contributing at least a third of the amount as a down payment and ensuring I had a steady income to cover payments comfortably. In my 20 years here, I’ve only taken three loans: my mortgage, which I’m on track to pay off early; a car loan that I settled in 16 months instead of 24; and another car loan, which I aim to finish in just a year. I pride myself on living within my means and instilled this philosophy in my son.

But what happens when those kids in BizTown can’t pay back their loans? Faced with tough choices, some began sacrificing profits and slashing operational costs, essentially cutting salaries and perks for their employees. This strategy was not only misguided but highlighted the pressure to succeed — even when the odds were stacked against them. One insurance company, for instance, took out a $75 loan but only sold three $15 policies. Even after allocating $30 of their profits to repay the bank, they still fell short by $45.

Then came the unexpected twist. When the adults overseeing BizTown noticed the failing businesses, they swooped in with a miraculous influx of funds, allowing the kids to avoid the crushing weight of failure. The children were elated, blissfully unaware of the source of this sudden financial windfall.

Intrigued, the journalists pressed the camp director for answers. His response? “We have the ability to subsidize so the kids don’t feel like they’ve failed in running their businesses.”

“But isn’t that SOCIALISM?” the journalist pressed, forcing the director into a convoluted explanation that danced around the uncomfortable label. He insisted that these were just kids, and lessons about business failures and bankruptcy were better suited for adulthood.

It left me pondering: Is this approach truly beneficial? Should we shield young learners from the realities of economic challenges, or is it crucial for them to understand the consequences of their financial decisions? What do you think?