The U.S. has a financial literacy issue, and the problem is both deep and potentially highly damaging to the U.S. economy, financial experts say.

The literacy challenge is worse than you might think. A brand new report out from the FINRA Investor Education Foundation states that two out of three U.S. adults "lack financial literacy" and that only 37% of Americans could pass a basic economic/financial knowledge test.

More bad news, as FINRA is just getting warmed up. This from the study:

- 18% of respondents spend more than they earn

- 21% have overdue medical bills

- 26% have used non-bank borrowing (such as high-interest payday loans or pawn shop loans)

- 32% only pay the minimum due on their credit cards

- 9% are underwater on their home mortgage

- Less than half (46%) have a "rainy day" fund set aside for financial emergencies

- Only 35% perform research or compare offers when shopping for credit cards

Gary Cardone, CEO of eConsumerServices, a dispute mediation firm, says he finds the study results troubling, "particularly with some analysts predicting the United States has a 60% chance of entering another recession within the next year."

"It's critical for consumers to have basic understanding of personal finance," Cardone says. "Those who don't often end up mired in debt, paying exorbitant interest fees, facing emergency expenses without a savings cushion or even filing for bankruptcy. Ideally, high schools should require students to complete financial literacy education to ensure they are prepared to make responsible financial decisions regarding credit, loans and savings when they graduate. But it's never too late for adults to brush up on their financial knowledge."

That's a great idea, if only U.S. adults would take Cardone up on the idea. But the fact is, they likely won't, and it all goes back to grade school for too many Americans.

TheStreet Recommends

"Basic financial principles are not taught at any level," says Paul Ruedi, founder of Ruedi Wealth Management, Inc., in Champaign, Ill. "You can get a medical degree and not ever hear about the time value of money." Don't expect Wall Street to help, Ruedi says. "That's a laugher, as Wall Street makes enormous profits by selling garbage to investors that don't understand basic financial principles, let alone the industry's ever increasingly complex products."

"The government should mandate classes in basic financial principles at a kindergarten to grade 12 level" he adds.

Even Americans smart enough to get professional help have a long way to go before they're financially proficient, other industry insiders say.

"When I ask my clients how far back in time one million seconds ago was, I usually get answers of over one year," says Mike Zaino, a founder of TZG Financial in Charlotte, N.C.. "But it was 12 days ago. When I bump it to a billion seconds, I get three-plus years. It was 31 years ago. When I ask about one trillion seconds ago? I get stupefied looks in return. It was 31,688 years ago! Western civilization did not exist and Neanderthals still walked the Earth."

It seems unfair to expect befuddled financial clients to know that one trillion seconds on the clock dates back over 31,000 years, but Zaino says the larger point is this - the financial literacy problem in the United States is in such a toxic state, because citizens have failed themselves. "We have not placed any emphasis whatsoever on financial education," he notes. "I'm only 45, but when I was in school, we learned basic fundamental math and how to apply it to everyday life in America. We learned basic accounting principles and were taught how balance a household budget. We learned about compound interest and how it could work for you or against you. We were taught how to do complicated math problems by hand, and not to rely on calculators. Not enough of this is taking place in today's school, and it's leading to a sharp decline in financial literacy."

Zaino says it's up to Americans to educate themselves on money and finance. "Wall Street and the U.S. government should stay out of financial education," he says. "After all, a million dollars ago was five seconds ago at the U.S. Treasury. a billion dollars ago was late yesterday afternoon. You get the picture."

Others agree.

Tom Wheelwright, a "Rich Dad, Poor Dad" advisor and author of Tax-Free Wealth, says that if people were truly financially educated, they would never buy mutual funds where 80% of the profits go to the fund. Like Zaino, Wheelwright says "the only way around this problem is for people to take direct action - there are plenty of financial education courses available."

Yet only a handful of states require a personal finance of financial literacy course prior to graduating high school, says Denise Downey, a financial planner and founder of Financial Trex, a financial advisory that specializes in money management education.

"The government should mandate that financial literacy be a part of our schooling," Downey says. "This education should start in grade school, teaching our children how saving, spending, and earning income work. By the time our children graduate from high school, they should have fundamental knowledge of compound interest, stocks versus bonds, time value of money, and saving for retirement."

A big problem is that math scares most people, Downey adds. "From my experience as a financial planner, most people don't understand money, therefore they want nothing to do with it from a management standpoint," she says. "Numbers confuse a lot of people, and most people think finance is all about numbers. It doesn't have to be. Important concepts such as compound interest and credit scores can be articulated without even mentioning a number."

As Downey says, times have changed, and the world of finance is getting more and more complicated. "Our grandparents did not have to deal with dozens of credit cards companies harassing them via email or social media," she says. "They had pensions that were invested for them, not 401(k)s, and they had a sound social security platform that they could rely on. They had one-or-two options for a mortgage - no adjustable rates, subprime mortgages, or reverse mortgages. They invested in individual stocks, not mutual funds, ETF's, derivatives, or hedge funds."

Yes, money management is complicated and daunting - but that's no excuse. The fact is, the more you know about financial matters, the more money you'll accumulate.

You'd think 66% of American adults would know that. But these days, financial ignorance really is bliss.