A Culture of Debt = A Non-Christian Culture

I have on my bookshelf at home a volume from the 1980s titled Usury: Destroyer of Nations. The author, a professing Christian, takes a very hard line against the taking of interest on any loan. He extends this analysis even to such things as income from the renting out of real estate or other durable goods. He bases his argument on various passages from the Old and New Testaments condemning the taking of interest on loans to "your brother who is in need" and commanding believers to "owe no man anything." Most of his attack on interest is directed toward lenders, but he makes it clear that he thinks borrowers are often at fault, too.

I do not dismiss this argument out of hand--I think we ignore the spirit, and even the letter, of Old Testament laws at our peril--but I am not convinced this position is correct. It appears fairly clear to me that the restrictions on lenders in these Biblical passages pertain to charity loans, and that commercial loans are not "on the table." If someone borrows money to finance a profit-making enterprise, it seems only just that the lender of that capital should share in those profits in the form of interest on the loan. So I do think there is a legitimate place for debt and interest, along with the things that go with it (such as banks) in a Christian society.

Still, the tenor of the Bible's statements about debt in general give the overriding impression that debt is never the optimal way to accomplish our goals. When we borrow, we are presuming upon the future in a way that James would probably frown upon. Thus, even in commercial situations, it is better to invest out of savings or the selling of equity when possible. When we borrow for consumption, except in emergencies for the bare necessities, we express a dissatisfaction with what God has allotted us in the present; we want to enjoy the fruits of tomorrow's labor today. And anyway, much debt-funded consumption is driven by the desire to fill the holes in people's lives that result from an alienation from God.

I could expand upon and support these ideas at length, but that would be boring. My point is that I'm pretty certain a predominantly Christian culture would be characterized by low levels of business debt and even lower levels of personal debt. Oh yes, and in my dream world there would be little or no government debt as well. In such an environment the financial crisis we had last year would literally have been impossible.

I applaud Dave Ramsey and other Christian counselors who teach debt elimination as a high priority in personal finance. It is a real shame that so many other forces in our culture combine to lure families, businesses, and the government into taking on more debts. Many people point fingers at corporations' aggressive advertising and the like, and we should certainly be outraged when products are fraudulently represented to potential customers.

A bigger problem, in my opinion, is our banking system's dangling of artificially cheap credit--thanks a lot, Ben Bernanke--in front of people. This practice stems from an even deeper misconception, widespread in academic and policy-making circles, about the nature of prosperity: the idea that we get wealthier by consuming more. This erroneous belief leads to endless efforts to "stimulate" the economy by encouraging higher spending funded by higher debt levels.

Exhibit A: the "Cash for Clunkers" program. What exactly was this program, praised to the skies by everyone from Nancy Pelosi to Larry Kudlow, all about? First, the federal government BORROWED billions of dollars (it was only supposed to be $1 billion at first, but like every other government program, it ended up costing several times that) to encourage people to trade in their old, paid-off cars and BORROW more money to finance the purchase of new cars. The old cars, most of which were in perfectly good working order, were then DESTROYED.

End result: a short-term bump in a few economic statistics in exchange for a higher national debt, higher monthly bills for low-income people who got lured into this deal, and higher prices across the board in the used-car market because so much supply was destroyed. That doesn't seem like a good deal to me.

OK, Christians--left, right, and center. Can we get on the same page here and agree that policies self-consciously designed to get American families to go deeper into debt are not consistent with the teachings of the Bible? If we really want to move our society in the right direction, we simply have to break free from the ideology that promotes this slavery.