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Comment by burlesona | Hacker News Reader

This is great news. I’ve long thought that high school students would be better served if they substituted statistics and finance for pre-calculus and calculus. Most people gain very little utility from Calculus, but a better understanding of Finance and Statistics, especially interest rates, amortization, time value of money, and probabilities.

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The lack of understanding of basic finance and statistics is crippling for many people.

I know fairly smart people who understand calculus but just cannot accept that there is a problem with paying interest on all of their purchases.

They simply do not understand that eliminating high interest debt as soon as possible (or never acquiring it in the first place) is essential to ever having financial security.

Honestly it sometimes feels like the normalizing of financial illiteracy is intentional, although I'm willing to accept that the lenders of high interest debt are just taking advantage of the situation they've found.

> I know fairly smart people who understand calculus but just cannot accept that there is a problem with paying interest on all of their purchases.

I do not think this is a problem with education. It sounds like they understand, they just do not care. I think that is a different (harder) problem.

You're unhappy that people do not believe it is beneficial to be debt-free. As you note - there are many groups who benefit (profit) from this kind of spend-spend-spend consumption culture.

Frankly, I am astounded that COVID did not bring about a massive economic collapse that would have driven the point about financial security home in a dreadful way. I'm grateful it didn't, though.

Well there’s a difference between high interest debt and just debt. And agreed don’t get into high interest debt to begin with and pay it off ASAP if you do anyway. But avoiding interest all together is a massive oversimplification and shows you don’t understand that cash in hand (and the ability to earn more from it) can be better than a low interest loan. If you make 10% from cash on hand and have 5% loans then you got free money and 5% gains.

I taught middle and high school math for many years, and I always offered financial-focused projects as an option for students. I also used financial examples on a regular basis, just to keep a healthy, rational conversation about financial literacy going. The two most important topics over the years seemed to be loan analysis and understanding taxes.

To understand loans, I taught students how to determine the monthly payment for a loan using a blank spreadsheet. For students who were intimidated by spreadsheets, we'd start the process on a whiteboard. Just a simple spreadsheet with columns like month, current principal, payment, towards interest, towards principal, new principal. Then guess-and-check to see what the payment needed to be in order to pay off the loan in a specified time period.

That was great, because it let everyone see how loan payments are calculated in the first place. Then it let curious students explore the impact of paying above the minimum, making lump sum payments at various intervals, different interest rates, initial no-payment periods, and other loan "features". We also looked at cumulative interest and other long-term aspects of a loan. Students could do their own projects about car loans, home loans, business loans, and more. Every time I've taken out a loan in my life, I've done this myself, and it's made the experience better every time. Just doing this once lets you talk to a loan officer on a much more eye-to-eye level. This is education as consumer advocacy, fighting back against predatory practices one class at a time.

For taxes, I just had students either bring in their own pay stubs or W2s, or work with a sample set related to a field they were interested in working in. Then I had them fill out a 1040 by hand. They had to start out with the simplest 1040, and they could choose to try a more complex version after that. I had them repeat the process for several income levels; most students had no idea what a "tax bracket" actually is. I'd start with a question like "You're making $__k/yr, and you're offered a $1k raise. The raise will bump you into the next tax bracket. Should you accept the raise?" Many students said no, because they had no concept of incremental tax rates.

You have to present this material carefully. If you tell a whole class of math students, "Okay, everyone's learning to analyze loans this week!" they'll hate it. If you say, "We're learning to analyze numerical patterns, and one of the patterns you can analyze is how banks determine the monthly payment for the car or house loan you might want in a few years", they'll jump on it.

For tax brackets, I like the bucket of ping pong balls analogy. After filling up each bucket you color a percentage of the balls green (done on the whiteboard of course), which represents the government's cut. When a bucket gets full, balls overflow into the next bucket. And monthly paycheck deductions are based on 1/12'th of the green balls in each bucket.

This then explains why when you get a bonus it is taxed at 22% as those balls go in the last bucket with room in it (or 24%..., whatever the highest marginal tax rate someone is in).

>For tax brackets, I like the bucket of ping pong balls analogy. After filling up each bucket you color a percentage of the balls green (done on the whiteboard of course), which represents the government's cut. When a bucket gets full, balls overflow into the next bucket. And monthly paycheck deductions are based on 1/12'th of the green balls in each bucket.

Thank you, this looks like a really clear and concise way of explaining the topic! I've been looking for a better way to explain it, particularly the bonuses.

Well if you had to have one or the other, I think you are actually right. Prob and stats are essential in any discussion of real-world data, which comes up pretty much every day. They are also the best way into dealing with something inherently messy, which data pretty much is all the time. It's a good way to talk about what you think is true and why, critical to decision making.

Calculus on the other hand is bit too beautiful. At high school level at least, you get all these smooth curves, everything has a nice closed form answer, and you start to think that maybe these beautiful shapes describe the universe. It's actually not that easy to do, it just happens that we found some examples where it works quite well, and they are just the kinds of things we teach in physics in those same years.

When we then get to an economics class, it unravels. There's a whole menagerie of calculus assumptions that creep into the minds of credulous students. Lets assume Cobb-Douglass production function. Let's say the utility must be this shape. Oh look at what beautiful conclusions we get.

Even algebra is of limited to no use for most people, and I support skipping it for something more useful to more people.

"How long do I need to keep money in an account for it to double if it grows at 8% a year" is an algebra problem. I suspect they're more common than you expect, you're just used to it.

I don't know if the current algebra curriculum is teaching people how to solve real problems though.

That might have been a useful project back when we actually had interest rates :)

You still pay a premium because of default rates. The better your credit score the lower the predicted default rate and the lower the interest rate.

Low interest rates on loans are actually a pretty bad idea to stimulate an economy because the majority of people do not have access to them. If you gave people a $1000 coupon that lets them borrow $1000 at 0% interest regardless of the default rate you are going to see a bigger impact on inflation rates. The benefit is that people only take the loan if they actually spend it, therefore this is superior to helicopter money. If they default that's fine because then it turns into helicopter money which is still better than more loans for houses.

Sounds like a road to more flat earthers and anti-vaxxers.

The more practical math and the less abstraction the less critical thinking.

I'm not convinced that most of my fellow "spheroid earthers" reached that conclusion through critical thinking - we learned from authority figures. In my science class we explored some arguments for a round earth, but if I recall they were trigonometry based and didn't involve calculus at all. I don't see any connection between calculus and "critical thinking".

I agree that this would be helpful but people are lazy and don't really care. They know the car costs $60K but they only ask what the monthly payment is. We really need a strong CPB to get rid of all the rent seeking and exploitative business practices that are all the "profit" centers for so many businesses.

> Most people gain very little utility from Calculus

Because the purpose of high school and basic university mathematics is to make people smarter. Algebra or calculus deal with abstractions and concepts that are hard to master. They are like lifting heavy weights. A course on statistics and finance is easier and hence like lifting light weights.

This has independent of the fact that high school teachers and underpaid, overworked, undertrained, and are forced to teach to the test, and so unable to really teach mathematics as they students deserved

I love me some Calculus, but the reason it is required is that 60 years ago we were worried that the Soviets were outpacing us in rocket design, which was seen as a major threat to our national security. Calculus is pretty darn useful for building rockets.

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