You need a new bike
Your chain is way too short. You are on the middle ring in front and what appears in the fuzzy picture to be about the third smallest rear cog. You can see that your rear derailler is already pretty stretched out. It should probably be vertical, if not pointed slightly back in this combination.
I suspect the original owner may have dropped the chain from the idler above the front wheel. This would introduce significant slack in the chain and may allow proper shifting. If the original owner did this, he would have shortened the chain. when he hooked the chain back up to the idler he didn't restore the chain to the proper length.
Go get your chain length adjusted. Any LBS can do it.