Literacy is the ability to read, or write at adequate levels, by means of a language. Literacy is generally considered to be crucial for many forms of employment and higher education. It is also serves to benefit democracies. Of this, John Adams said "Liberty cannot be preserved without a general knowledge among the people."
The National Center for Education Statistics has three separate categories of literacy: prose, document, and quantitative. Prose literacy is the ability to read and comprehend written material, document literacy is the ability to understand maps or schedules, and quantitative literacy is the ability to do basic mathematic functions. According to their 2003 National Assessment of Adult Literacy (pr NAAL) report, 30 million adult Americans do not have basic prose literacy skills. Someone who has basic literacy can "perform simple and everyday literacy activities." By this account, 14% of the adult population was "functionally illiterate," which means they may or may not be able to perform the simplest "literacy" skills (such as recognizing their own name, rather than reading it). 
"The man who does not read good books has no advantage over the man who cannot read them." - Mark Twain (1835-1910) http://andylangton.co.uk/stuff/cool-quotes]