Online Lessons:

As I am watching my spouse, a college professor, working long days to convert her course content so it can be delivered online, I thought I would examine how a teacher-student online dialog might go for an elementary Finance course.

Student: My parents run a small business and said they may need to take a loan to get more cash. I don’t know who provides this needed money?

Teacher: Given the current crises due to the virus, it is not surprising they need financial help. They will likely ask their bank for the loan.

Student: Why does the bank provide this help?

Teacher: The bank does this because they earn money on this loan. They charge an interest rate. It is a complicated process we will cover in an advanced course

Student: So is the promised help being offered by the President free money, or interest-free?

Teacher: Will this is also a bit complicated. But let me summarize: The money that your parents may get is actually your parent’s money, along with everyone who pays into the Government who requires their money in the form of taxes, fees, and many other ways.

Student: So if it is our money, we don’t have to pay an interest cost when we get it?

Teacher: This is a good question and also very complicated. But do not worry. The interest charged on this money being sent to you, and other Americans, is only a small part of the money the Government will need to borrow to help all American small businesses, like your family’s, and large businesses, like Airlines and Cruise ships, due to the crises.

Student: WOW. This must cost a lot of interest!

Teacher: Oh, that is true. So much, we cannot use a calculator to know how much this will be. But you and your parents do not have to worry about all this cost. It will have to be paid back by you and your friends when you grow up and have to go to work. And by your children when you have a family, and then their children, and their children, and on and on and on.

Teacher: The key learning objective: Government money is not free.

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