Wednesday, September 24, 2008

Debt Disaster

I'm not weighing in on the Paulson-Bernanke bailout proposal, or the counter-proposals, or the politicking. I want to share two things: First, the biblical allusion that comes to mind as I read about the bailout. (But note that there is no perfect correlation ... there was no equity market in the ancient world, never mind collateralized debt!) Second, thoughts on debt in today's captalism. The first is on the macro, social level. The second is on the micro, personal level.

The biblical allusion: Joseph managing the seven years of plenty and the seven years of famine for Egypt and the surrounding region ... No comment beyond that, but feel free to look it up in Genesis 41 and Genesis 47:13-26. Check out the intervening text for a remarkable story of reconciliation. But rememember: I AM NOT SUGGESTING A PARTICULAR IMPLICATION. It is just the only biblical story with any connection on the macro, social level, at least the only one that comes to my mind. Feel free to suggest others in the "comments".

Thoughts on debt in today's captalistic society: We have become convinced that debt is a SAFE way to get NOW what we cannot afford. The value of thrift, patience, and saving has been forgotten. But debt can be construed as "safe" only when the item retains value (even, at least to a degree that protects some equity, in economic downturns), when the payments do not dominate the household budget (having margin for the unexpected), and when you actually have equity. Admittedly, options are limited for many of us and debt cannot be avoided in all cases. Nevertheless, we need to begin to practice thrift, patience, and saving -- along with holy generosity -- as necessary aspects of financial as well as spiritual health. Debt is far from safe, and our economic ideal of a good citizen as a good "consumer" leads us to the insistent conclusion that good citizens get NOW what they cannot afford. Paul, on the other hand, wrote, "Owe no one anything, except to love one another" (Romans 13:8).

No comments: