WASHINGTON

THE FINANCIAL CRISIS recently turned Capitol Hill into a buzzing hive of activity, filled with members of Congress in pizza-fueled all-night negotiations. Staffers for both parties have been inundated with phone calls from constituents, and the House Web site was temporarily shut down by the overwhelming volume of e-mails regarding the recently enacted bailout legislation. With Election Day coming on fast, you can be sure that Congress is listening. However, I’m not so sure they should be or whom they should listen to.

It’s hard to tell who is least trustworthy regarding the economy: the reckless bankers who led their companies into insolvency, the ordinary borrowers who got in way over their heads, or the other policymakers who don’t know the difference between commercial paper and copy-machine paper.

According to a recent survey our organization sponsored to gauge America’s financial literacy (or lack thereof), many Americans are basically unqualified to manage their own checking accounts, let alone save a collapsing credit market. Even more disturbing, those who have been charged with getting us out of this mess aren’t much better off: Fewer than 15 percent of current members of Congress have a degree in economics, business or finance.

When 70 percent of adults can’t identify FICO (Fair Isaac Corporation) scores as the most important factor in obtaining a mortgage, and a similar percentage doesn’t know how interest is calculated on late credit-card payments, it’s not hard to see that our present economic turmoil is connected to our collective financial ineptitude. The survey made it clear that economic illiteracy is startlingly widespread and contributing to problems in all sectors of our economy.

While the causes of this latest financial crisis are complex, there’s no denying that mortgage defaults and foreclosures are a big part of the problem. And whether you want to lay some of the blame on dishonest mortgage brokers or foolish Wall Street investment houses, the fact still remains that millions of Americans were borrowing far more than they could afford to repay. For many of the consumers who took out adjustable-rate mortgages with low introductory interest rates, a lack of financial education seems to have stopped them from asking basic yet vital questions about their loans.

Even a question like “How much will my monthly payment be in five years?” would have helped a lot of people recognize they were getting in over their heads. Instead, a “what you don’t know can’t hurt you” attitude caused millions of Americans to lose their homes, their savings, and contributed to the overall sorry state of the economy. And even those who knew were in denial that prices of stocks and homes can move in two directions.

Personal finance is considerably more complicated than it was a few decades ago, but financial-literacy education hasn’t kept pace. For example, instead of relying on an employer-provided pension, more and more workers are now expected to manage their own retirement savings in 401(k)s, Roth IRAs, and an alphabet soup of other investment vehicles.

Effective retirement saving requires an understanding of concepts like inflation, deferred taxation and asset diversification. There’s a lot to be said for individual retirement plans, but a recent survey by Rutgers University found that almost 30 percent of Americans have more credit-card debt than retirement savings. And in 2005, our national savings rate dipped below 0 percent, for the first time since the Great Depression. The long-term consequences of this overspending and under-saving are truly frightening.

Why are Americans making such bad financial decisions? Many of us just don’t know any better. We may be home to the world’s largest economy, and a public-school system that spends over $500 billion every year, but only three states mandate personal-finance classes in schools. The other 47 presumably expect students to learn from their parents, three-quarters of whom admit they are unprepared to teach their kids about personal finance.

John F. Kennedy called on Americans to “think of education as the means of developing our greatest abilities.” We must now focus on developing our ability to make smart financial decisions through education, because a nation of economic illiterates cannot prosper. We must not repeat the mistakes that got us into this credit mess, and we must be vigilant in our efforts to increase financial education for all Americans.

James Bowers is the managing director of the Center for Economic and Entrepreneurial Literacy (www.- econ4u.org).