THE BIBLE AGAINST DEBT

"God gives you power to get wealth." (Deuteronomy 8:18)

Anonymous

(Investigator 133, 2010 July)



INTRODUCTION

The Bible condemns debt because the Bible promotes "liberty" (James 1:25) whereas debt enslaves:
"The rich rule over the poor, and the borrower is the slave of the lender." (Proverbs 22:7)
Debt destroys families, damages health, and tempts people into crime, gambling and alcohol.

The Bible is rich in financial guidance with principles to minimize financial worry.


"THE WICKED BORROW, AND DO NOT PAY BACK" (Psalm 37:21)

Bagnall (2000) reported: "In the past financial year, 23,298 Australians filed for bankruptcy, compared with 8,493 a decade earlier… Excessive use of credit card is second only to unemployment as the most frequently cited cause of personal bankruptcy…"

South Australia's Sunday Mail reported: "Australia is sitting on a personal debt time bomb, with a likely explosion in bankruptcies. Credit card debt has sky-rocketed more than 1300 per cent in the past 20 years and now stands at $34 billion." (March 12, 2006, p. 76)

Australia's total personal debt (mortgages, credit cards, and personal loans) increased from $39billion in 1989 to $1000 billion in 2006. (Murdoch 2006)

Kearney (2005) reported: "More than a million Australians have been referred to a debt collection agency in the past three years…"

In Australia the "wicked" who "do not pay back" include parents not making their child-support payments. In 2006 225,000 non-paying parents owed $900 million. (Haberfield & Wright 2006)

Borrowing to buy a major asset would not make the borrower "wicked" if he meets agreed-on repayments. But he is still financially restricted, a "slave of the lender". Quick repayment will increase his freedom. It's also not the debtor's fault if a contract uses 1000 words of legal jargon to state "After one year your monthly repayments will increase by $4000" and this isn't explained. The salesman knew default is inevitable but deceived the purchaser — the Bible condemns lying. (Colossians 3:9)


TITHING

The Texas-based John Avanzini ministry claimed: "PEOPLE CAN BE financially free if they have faith God will wipe their debts. FOR A SUM EQUIVALENT to one-hundredth of any debts, Mr Avanzini will pray to God for the bills to be paid." The ministry offered to burn people's bills. Someone with a $100,000 mortgage would pay 1/100 i.e. $1,000!

The SA Consumer Affairs Commissioner advised: "A bill-burning ceremony will not make bills and mortgages go away." (Sunday Mail, November 29, 1998)

Avanzini (b.1936) authored The Wealth of the World (1989),  Stolen Property (1989) and War on Debt (1990). He claims Christians have authority to take wealth from unbelievers but must obey God by donating "tithes and offerings".

However, the Old Testament tithe [10% of income] was paid by Israelites to support the Levites — priests who forfeited land-ownership and ordinary means of income.

Tithing, therefore, may not apply in the Christian setting. The New Testament teaches "generosity" without specific percentages.



BIBLICAL COUNSEL

Principle 1—Plan ahead; stay informed
For which one of you, when he wants to build a tower, does not first sit down and calculate the cost, to see if he has enough to complete it? (Luke 14:28)

Any enterprise is built by wise planning, becomes strong through common sense, and profits wonderfully by keeping abreast of the facts. (Proverbs 24:3-4)
Principle 2—Possessions in moderation

Ilyce Glink, author of 50 Simple Things You Can Do to Improve Your Personal Finances, says that buying stuff is the source of most personal finance trouble. People upgrade their possessions — a bigger TV, a second car — without considering "Is it necessary? Can I afford it?"

Wealth sometimes disappears suddenly: "Do not wear yourself out to get rich; be wise enough to desist. When your eyes light upon it, it is gone; for suddenly it takes wings to itself..." (Proverbs 23:4-5)

Therefore buy what's necessary and luxuries only if you have money to spare. Be "temperate…sensible". (I Timothy 3:2, 11) Extra possessions may initially boost your ego; then crush it when your financial crunch comes.

Principle 3—Save
The wise man saves for the future, but the foolish man spends whatever he gets. (Proverbs 21:20)

For the protection of wisdom is like the protection of money… (Ecclesiastes 6:11-12)

Money meets every need. (Ecclesiastes 10:19)

Principle 4—Control your desires, be content
…the desire of the flesh, the desire of the eyes, the pride in riches — comes not from the Father but from the world. (I John 2:15-16; James 1:14)
TV and glossy catalogues saturate our lives with images of wealth and stimulate the "Desire to Acquire". Don't dream about luxuries, instead learn contentment:
I have learned how to get along happily whether I have much or little… I have learned the secret of contentment in every situation, whether it be a full stomach or hunger, plenty or want. (Philippians 4:11)

Principle 5—Repay promptly

In South Australia 30% of Housing Trust tenants — 13,000 out of 45,000 — owed an average of $780. (Kemp 2005) If you're in debt but have spare cash, reduce the debt instead of buying more goods:
Don't withhold repayment of your debts. Don't say ‘some other time,' if you can pay now. (Proverbs 3:27-28)

Owe no one anything… (Romans 13:8)

Pay to all what is due them. (Romans 13:7)

Principle 6—Control bad habits

Avoid cigarettes, gambling, drugs and other costly bad habits:
Do not be among winebibbers, or among gluttonous eaters of meat; for the drunkard and the glutton will come to poverty, and drowsiness will clothe them with rags. (Proverbs 23:20-21)

Principle 7—Work

The basic way to avoid debt is work:
Work with your hands that you may be dependent on no one. (I Thessalonians 4:11)

A little sleep, a little slumber, a little folding of the hands to rest, and poverty will come upon you. (Proverbs 6:9-11)

Through sloth the roof sinks in, and through indolence the house leaks. (Ecclesiastes 10:18)

Work brings profit; talk brings poverty. (Proverbs 14:23)

Principle 8—Don't turn to crime to solve debt

Don't be a robber (I Corinthians 5:11), "greedy for money" (I Timothy 3:8), or "a thief." (I Peter 4:15)


Principle 9—Seek counsel

If debt problems result from ignoring the Bible, counsel can come from Christians. If the problem concerns investment, inflation, value for money, or taxation seek advice from qualified people.
Without counsel, plans go wrong, but with many advisers they succeed. (Proverbs 15:22)

In abundance of counsellors there is victory. (Proverbs 24:6)

SUCCESS

Helpful strategies only help if you apply them: "But be doers of the word, not merely hearers…" (James 1:22)

Hopefully, by applying the above principles you will be financially secure and have spare money for charity:
May the Lord give you increase, both you and your children. (Psalm 115:14)

He who gives to the poor will not want, but he who hides his eyes will get many a curse. (Proverbs 28:27)

My God will supply every need of yours according to his riches in glory in Christ Jesus. (Philippians 4:19)
Successful finances and generosity will add to your good reputation: "A good name is to be chosen rather than great riches, and favor is better than silver or gold." (Proverbs 22:1) First-century Christians raised money for evangelism, famine-relief, and the destitute. (2 Corinthians 9; James 2:15-16; Proverbs 19:17)   

Don't, however, accumulate ever more money and stuff: "Keep your lives free from the love of money, and be content with what you have…" (Hebrews 13:5) Jesus told of a prosperous man who planned to pull down his barns and build bigger barns — but who died that night! (Luke 12:13-21)

Job was rich. (Job 42:10-12) Being rich is not wrong. Trusting in money to the exclusion of God and being tight-fisted, however, is:
As for those who in the present age are rich, command them not to be haughty, or to set their hopes on the uncertainty of riches, but rather on God… They are to do good, to be rich in good works, generous, and ready to share… (II Timothy 6:17-18)

Happy are those who fear the LORD… Wealth and riches are in their house… They have distributed freely, they have given to the poor… (Psalm 112)

GOVERNMENT DEBT

The biblical ideal is to lend, not borrow: "When the LORD your God has blessed you, as he promised you, you will lend to many nations, but you will not borrow…" (Deuteronomy 15:6)

African countries recently had substantial debt cancelled — borrowed money had been misused and they couldn't repay. Rather than these nations instituting better economic management there's "another round of debt accumulation" with China now a leading creditor nation. (Beattle 2006)

In 1982 Mother Teresa's work was called "radically flawed" because: "…the amelioration of human misery unaccompanied by revolutionary practice merely makes an unjust situation more tolerable and delays the day of revolutionary reckoning." (Gregg 1998) The Christian's obligation, however, is to "love your neighbour" in the economic situation he's in. If helping the poor "delays the day of reckoning" that's the responsibility of those who create economic systems that lead to "reckoning".

In 2008 American banks and insurance companies began to crash and worldwide economic collapse threatened. The catalyst was America's "sub-prime tsunami" — home loans to millions of borrowers with poor credit histories. Lenders bundled these loans into "collaterised debt obligations" and sold them to international financial markets. House-owners began to default, house values plummeted leaving banks unable to recover debts and therefore unable to make further loans. Lack of credit slowed America's economy.

The US Government saved the situation with a $US700 billion plan to buy toxic debt from distressed companies (which, however, increased government debt).


DEBT — AMERICA

Until the 1980s the USA was the world's greatest creditor nation. But President Bush sought popularity through tax cuts despite the expensive "war on terrorism" and expansion of Medicare. Greater government spending without higher taxes meant debt: "The growing external deficits of the world's sole superpower have put the global economy on a path that is…unsustainable… This year…the U.S. deficit…will absorb close to a sixth of the world's gross savings." (Wolf 2004)

The US Federal deficit for 2009 alone was $1.8trillion, 12% of GDP. In absolute terms the US is now the greatest debtor nation. The Government finances its debt by issuing bonds on which it pays interest. At some stage increasing interest payments may leave the Government unable to finance social security!

California faces "catastrophe" because of its cumulative annual deficit: "Governor Arnold Schwarzenegger sent lay-off notices to 20,000 public employees yesterday as the state teetered on the brink of financial collapse… All public works are being cancelled…" (The Australian, February 19, 2009, p. 8)



DEBT — BRITAIN

Britain's recent bail-outs of major banks doubled its government debt, increasing it by ₤1.5 trillion. (The Weekend Australian, February 21-22, 2009)

Saunders (2010) reports: "Government spending increased 54 per cent in the Blair-Brown years. Spending on social security payments…and government education and health budgets spiralled…financed by borrowing. Interest charges alone already cost more than the entire defence budget…each British household is burdened with an average of £90,000 of government debt…"



DEBT — AUSTRALIA

In 1996 Australia's Labor Government left a debt of $96billion. The Liberal Government eliminated Commonwealth debt in 2006. This made demographic sense since the "Intergenerational Report" projected the number of working-age people would increase 17% by 2042 but retirees 250%. More dependents would, if debt kept growing, bankrupt Australia.

Labor returned in 2007 to a budget-surplus, but in 2008 gave away $10 billion to counteract recession. A $42 billion stimulus package followed. The money is being borrowed by selling Treasury bonds backed by new legislation extending Australia's credit limit to $200 billion.



CAUSE OF GOVERNMENT DEBT

In democracies political parties make election promises often paid for by borrowing and not by higher taxation (since that might lose the next election).

In Greece public debt recently reached $480billion, due to annual deficits of 13% of GDP, threatening "national bankruptcy". Walker (2010) says the crisis is "rooted in graft":
Last year, 13.5 per cent of Greek households paid a bribe,  €1355 on average… ordinary citizens hand out cash-filled envelopes to get driver's licences, doctor's appointments and building permits, or to reduce their tax bills… A quarter of all taxes owed in Greece are not paid… In the months before the last election, the government added 27,000 people to the public payroll…these traditions of corruption and cronyism have produced…a crisis of confidence that is shaking all of Europe.
Greece avoided bankruptcy by introducing €30billion worth of austerity measures in return for €110billion further loans from the IMF and euro-zone countries.

In China, Party officials get easy access to bank loans even for non-viable projects:
…bad loans in the Chinese financial system have reached a staggering $US911 billion…40 percent of gross domestic product...
The party can no longer secure the loyalty of its 70 million members through ideological indoctrination; instead, it uses material perks and careers in government and state-owned enterprises (SOEs) …in 2003, 5.3 million party officials held executive positions in SOEs. (Pei 2006)

CONSEQUENCES

High public debt hurts economies through currency depreciation, inflation, and fear of default. This pushes up interest rates which drags economic growth down.

In March 2010 the US Government announced it would print $1.2 trillion. But more money printed means inflation. Inflation in turn is thievery because savings lose value — and thievery is condemned in the Bible.

The Roman Empire collapsed in part because of debt. American power seems similarly threatened — with debt reducing America's ability to tackle political/economic crises and climate change. In Europe sovereign debt is threatening European unity. The ecological damage from climate change, ozone depletion, deforestation and overfishing from 1967 to 2007 was estimated at $47 trillion! (New Scientist 26 Jan 2008, p. 7) What if on top of crippling debt, climate change really kicks in?

The Bible prophesies future panic when all nations face destruction. (Revelation 6:12-17) Money will then be worthless: "They shall fling their silver into the streets..." (Ezekiel 7:19)


CONCLUSION
"Poverty and disgrace are for the one who ignores instruction." (Proverbs 13:18; Isaiah 48:18)

Over the years I've presented hundreds of points in which the Bible was correct and critics wrong. These include big issues such as asteroid impacts and health consequences of sexual immorality, and lesser issues such as the historicity of Bible names.

Debt is another big issue in which people and nations ignore the Bible to their own detriment.

REFERENCES:

Bagnall, D. The Bulletin, November 28, 2000, pp 28-32.
Beattle, A. The Weekend Australian, December 9-10, 2006.
Greg. S. Herald Sun, December 9, 1998.
Haberfield, I. & Wright, L. Sunday Mail, August 6, 2006.
Kearney, S. Sunday Mail, February 20, 2005, p.15.
Kemp, M. The Advertiser, February 2, 2005.
Murdoch, S. The Advertiser, September 30, 2006.
Pei, M. The Australian, May 9, 2006.
Saunders, P. The Australian, May 10, 2010.
Walker, M. The Weekend Australian, April 17-18, 2010.
Wolf, M. The Australian, December 9, 2004.

The Bible, including biblical ethics, examined on this website:

http://users.adam.com.au/bstett/

http://ed5015.tripod.com/