No, it’s not Caleb, this is Landon Vick. I’ve been teaching a class on Biblical Economics with Brad Bleasdale at Grace Pres in Cookeville, TN. Here’s a summary of our most recent class.
Debt is pervasive in our society. Our Federal Government has a current debt in the neighborhood of 12,800,000,000,000 dollars, that’s trillions if you aren’t used to seeing it, I’m not. This year our budget deficit is adding around 1,500,000,000,000 to that federal debt. Not to be out done, household debt in the United States is approximately 13,800,000,000,000 (which included mortgages and consumer debt like credit cards), and the average family has a credit card balance of 8,000. This isn’t necessarily new. In his book Financing the American Dream: A Cultural History of Consumer Credit, Dr. Lendol Calder says, “There’s “a river of red ink” that runs throughout American history. In the 1880s, a middle-class family would owe money to the doctor, the banker, the butcher, the hardware store, several friends, family members, and that looks pretty much like today, the only difference being the way they get credit. But the sheer fact of debt and credit is the same.” Indeed in the Scriptures we are warned of the dangers of debt, it’s not new.
So what exactly is debt. Simply put, Debt is the result of consuming today the fruit of tomorrow’s labor. Debt is living on borrowed time, money, and energy. Debt is TV’s, cars, houses, furniture, vacations, college and in extreme cases debt is groceries, clothes, bills, insurance, and taxes.
Why is it so attractive and tempting?
We are impatient – Who likes to wait? We like to think that we are an immediate gratification society, which we are, but I suspect that this need for quick gratification or food or clothing is not just a recent phenomenon. When Paul encourages the church in Galatia to walk in the Spirit he says in chapter 5, “But the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, self-control; against such things there is no law. And those who belong to Christ Jesus have crucified the flesh with its passions and desires.” Debt is the answer to our impatience as opposed to discipline and self-control in the fulfillment of our passions and desires.
Debt is convenient – There is no shortage of ways to access credit. Where convenience is often a blessing here it is much more so a curse. The easy access to credit enables us to enter into all sorts of transactions with the hope of paying for them tomorrow. I always think of James in the chapter 4 when he writes, “Come now, you who say, “Today or tomorrow we will go into such and such a town and spend a year there and trade and make a profit” – yet you do not know what tomorrow will bring. What is your life? For you are a mist that appears for a little time and then vanishes. Instead you out to say, “If the Lord will, we will live and do this or that.” As it is, you boast in your arrogance. All such boasting is evil. So whoever knows the right thing to do and fails to do it, for him it is sin.” We are like grass and we don’t know what tomorrow holds, debt is convenient, but it binds us and we may not be here to repay it.
Debt makes the impossible, possible, it masks reality – The idea of leverage is such that why put a particular amount of money at risk when I could borrow someone elses money and have a much smaller payment but secure the same asset.
Example – buy a $100,000 house with a $35,000 income or pay $7,500/year, most folks would take the $7,500/year, that’s leverage.
Most of the folks that find themselves in debt do it unknowingly in a sense. What they see is a monthly payment. When you seek financing at a car dealership you don’t talk rate and terms, you talk payment, this is dangerous. The minimum credit card payment is nice but it only masks the true liability that a person possesses. Debt masks reality.
We covet – We have discussed the consequences of the 10th commandment often in this study. Coveting is so dangerous, and such a silent evil that we often justify with cute comment like, “oh you deserve this” or “oh treat yourself to this” or “oh just do it, you only live once.” Debt is ammunition for a coveting heart, and when wrongly applied it only feeds our materialism.
What do the Scriptures say?
Over the years I’ve struggled personally, with the appropriateness of debt at different levels or debt at all. If you search for a Christian perspective on debt you’ll get a wide spectrum of views. Think about these passages.
Exodus 22:25-27 If you lend money to any of my people with you who is poor, you shall not be like a moneylender to him, and you shall not exact interest from him. If ever you take your neighbor’s cloak in pledge, you shall return it to him before the sun goes down, for that is his only covering, and it is his cloak for his body; in what else shall he sleep? And if he cries to me, I will hear, for I am compassionate.
Leviticus 25:35-38 If your brother becomes poor and cannot maintain himself with you, you shall support him as though he were a stranger and a sojourner, and he shall live with you. Take no interest from him or profit, but fear your God, that your brother may live beside you. You shall not lend him your money at interest, nor give him your food for profit. I am the LORD your God, who brought you out of the land of Egypt to give you the land of Canaan, and to be your God.
Ezekiel 22:12 In you they take bribes to shed blood;you take interest and profit and make gain of your neighbors by extortion; but me you have forgotten, declares the Lord GOD.
The thrust of these passages is not to universally forbid the charging of interest but to forbid the exploitation of someone in need, particularly a brother. You can imagine in a largely agrarian and tribal culture that once money was borrowed, paying it back had to be very difficult since there was such a lack of surplus wealth or opportunity to generate income. Additionally, the lending was done by a select few rich to the many poor. You can imagine that fair dealling was likely hard to come by since there weren’t any Fair Credit reporting laws or Community Reinvestment Acts. Taking advantage of folks had to be easy. These commands are encouraging love and compassion more then they are forbidding the charge of interest. Rather than taking verses and trying to expand them into something they aren’t, theses verses should convict our hearts in how we help the poor, protect them, and deal with them in times of need.
As we discussed in our class on money, mediums of exchange evolved over time into the common currencies we have today. Somewhere along the way, money changed from something sterile to something fertile that had value. Somone borrowing money is “renting,” so to speak, that money’s value. This would be similar to the way that folks rent houses, condos, or tuxedos. The charging of interest, also evolved into a transaction in risk and investment as opposed to only an exploitation of need.
The title for this class is Debt: The Good, The Bad, and the Ugly. That is how I’ll wrap this up.
The Good –You might smirk at the idea of something good about debt. But here it is. When debt is used properly; and by that I mean with wisdom and prudence in investment, it can yield fruit, profit, and wealth. For much of the history of the world money was in a sense sterile. If it was lent or hoarded there wasn’t much that could be done with it. But as division of labor expanded and trade grew and cultures began to transact with each other outside of the historical familial or village setting, opportunities to invest sprouted and soon abounded. The result is what we know as the time value of money. There a clear distinction to be drawn between debt as it relates to capital investment and debt as it relates to everyday consumption. Debt serves a purpose in the economy when it is used: prudently, with understanding, in moderation, and in light of our calling in this world.
The Bad – Proverbs 22:7“The rich rules over the poor, and the borrower is the slave of the lender.”Each time I see a credit card commercial I laugh and cringe. Easy credit is sold as freedom, freedom to transact as you like, when you like, wherever you like to purchase whatever your heart desires. It’s anything but that. Debt is a burden. God’s prohibition against charging interest in some situations showed is care for his people because debt is a burden. If debt was not a burden Dave Ramsey would not be Dave Ramsey. People call in to his show to yell freedom because they have actually been freed when they com out from under debt. Debt is a borrowing of the future and a weight on our minds. I believe that when we play with debt and get comfortable with it, we aren’t only mortgaging our earnings, but we are mortgaging our lives. We were bought with a price so let’s not become slaves of men.
The Ugly – Debt is the primary component to a financial perfect storm. We’ve heard the statistics of how frequently money was a factor in divorce, and by money I mean money owed. Or how often have we heard of suicide connected to money problems, and by that I mean debt. Debt is a mortgage on our life and it robs us, spiritiually, in our relationships with God and others. We should endeavor to apply these truths like all other truths to the whole of our lives. If we can’t afford someting today and our lives or the lives of our family are not at stake then we just don’t buy it. While I don’t think we can definitively deny debt in any form scripturally, the Bible’s position on debt as it impacts the debtor is clear. It is a burden. If we find ourselves in debt, or coveting, like any other sin, let us repent, take steps to remove that sin or payoff that debt, seek counsel, and trust in the Lord. If you are not in debt, then praise God that he has blessed you and your family, and seek to help those that find themselves struggling.
SDG,
Landon
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