Mom, What's a Sequester?

It's hard not to get a sense of panic right now about the impending across the board budget cuts set to hit Friday if the Congress doesn't do what it's supposed to do, i.e., govern (make choices, make decisions, compromise extremist politics for the good of the whole).  Of course these days it can be hard to distinguish the actual reality of the crisis from within the multi-media hullaballoo that surrounds us, and it can be challenging to distinguish this fiscal crisis from the fiscal cliff we were just perched upon and the one set to hit later in the year (which is really the one from before, which we solved by pushing until later). How worried should we be?  Very worried, we are told.  Weren't we supposed to be worried that time before, but everything turned out okay?  Yes, but this time is different, and by the way we weren't really okay.  Oh, okay.

So now explain all of this to a 7 year-old.  Or should you try? There seems to be general agreement out there in parenting-advice-land that it is never to early to begin to explaining budgeting and saving and sound home economics to children, though there is some disagreement on how to do it.  I'm a bit daunted by the prospect of this, as I'm somewhat haphazard in my own budgeting, but I get why.  When does it make sense to explain national and international budget issues and economics (particular when the way we manage our national budget seems to run contrary to everything we're supposed to be telling our kids to do with their own money, for the most part).  Why not start early?  But the question is, how?

Since I'm not an economic policy whiz, I did what any parent would do: I googled it.  I found nothing particularly helpful about how to explain sequestration and it's impact to children, although I did find a lot on the impact of sequestration on children (bad, very bad).  Seems to me that if something is going to have a negative impact on a lot of children, we should be able to explain to them what it is and why it's going to happen.  It's only fair, and wise, especially if we want to raise children to take responsibility for themselves and others, and to be good fiscal stewards of their homes, communities, and the broader world community.

I did find some interesting resources on explaining economics to children, which I thought I'd share.  The quick fix explanations of economic issues (for instance here, on the fiscal cliff) I find somewhat unsatisfactory, I think because they remind me of most parenting books, which speak with absolute assurance about the absolute right way to do things, and make you feel rather sheepish about having to ask.  I prefer some of the broader resources, which offer a range of options, including books you might read to your kid otherwise and tips on how to use them to explain useful concepts.  Oddly (at least to me), the Federal Reserve has a page with links to lesson plans on how to use children's literature to explain economic concepts.  So, the lesson on one of my favorite books begins:

Little House in the Big Woods describes how the Ingalls family produced the goods they needed to survive while living in a log cabin far from their nearest neighbors. In this lesson, students will define the production function as the combination of inputs that results in outputs and will identify the inputs as human resources, capital resources, natural resources, and intermediate goods. 

Okay, maybe we won't start there, because I just might start to cry.

I like the Rutgers "EconKids" site, which also suggests ways for parents and teachers to use children's books to teach economic concepts to children, but provides a real diversity of topics and maybe less of a hard sell on the homo economicus stuff.  I particularly like the section on Text-to-World connections, which suggests books that will help kids relate ideas to economic, business, and financial situations they observe in the world around them.  There are some appealing books with stories about microfinance and the Grameen Bank (really!) and books about the Depression that explain unemployment and job loss.  If you are super motivated, you can read a research paper by Rutgers on teaching economics to children using stories.  All of this seems to be an extension of the dubious but time honored tradition of using children's literature to communicate moral stories, although it is oddly and sadly fitting that many of 'moral tales' can now be seen as being about money.

So, how are you explaining the mess we're in and how we got there to your children?