So what's been in the news lately? Let me give you a very brief overview:

Subprime. Credit crunch. Banking bailout. Banking failures. Foreclosure. Default. ARMs. Massive losses. Falling housing prices. Layoffs. Rate cut. Auto bailout. Markets plunge ...

... Recession.

As the nation's economic situation gets ever more disturbing, we're seeing a flurry of efforts to stabilize things. If you are (or were) a shareholder of Citigroup (NYSE: C), Fannie Mae (NYSE: FNM), General Motors (NYSE: GM), Ambac Financial (NYSE: ABK), AIG (NYSE: AIG), or a host of other hard-hit companies, you know firsthand just how tough it's been. There's about $350 billion left in the TARP program to stimulate the capital markets, and President-elect Obama intends to introduce another "massive stimulus" to get the economy rolling again.

But it's possible that the best way to ensure this mess never happens again isn't any of these things, but something much simpler:


During her presidential campaign bid, Sen. Hillary Clinton (D-N.Y.) talked to The Washington Post's Michelle Singletary about her proposed economic stimulus package, saying:

A lot of people are in over their heads in debt, and it's not just mortgage debt. It's credit card debt. It's consumer debt of all kinds. It's college loan debt. It's medical debt. And what we've got to do is provide as much help as possible to give people a chance to work their way out and get their finances in order short of having to go into bankruptcy.

Back then, Clinton proposed to create an "emergency support fund" that would, among other things, help pay for financial counseling for troubled households.

Singletary added, "Financial counseling can do more for households and communities than any tax plan," and she was absolutely right. The right financial counseling will do more than just bail people out in the short term. Done properly, it will teach people to build wealth over the long haul. And that will go much farther than any check from the government.

Here at the Fool, we've turned our attention to financial literacy via our philanthropic initiative, Foolanthropy. As Clinton pointed out in the Post article, schools once taught home economics as a matter of course; students learned to balance checkbooks, create budgets, and control the money coming in and out of their lives. Nowadays, too few people know even these basic skills.

The current crisis in the economy is a powerful reminder of the troubles to which financial illiteracy can contribute. It's also a wonderful chance to change this pattern.

Foolanthropy is dedicated to ensuring that the next generation of Americans will be much better armed against financial shake-ups of all kinds. Our current Foolanthropy campaign supports a wonderful charity called Donations will support financial literacy in high-needs public schools across the nation. There are two days left in the campaign, so if you can get behind this cause, join us right now with a donation.

For more on Foolanthropy:

A previous version of this article was published Jan. 24, 2008.

Ellen Bowman 's finances are better when she stays away from the iTunes store. Ellen does not own shares of any company mentioned. The Fool has a disclosure policy.