Q & A: Dave Ramsey

The popular Christian financial adviser on why he thinks the bailout is a disaster.

Christianity Today September 26, 2008

The government has rushed to aid several corporations in recent months, hoping to contain an economic crisis. President Bush urged Congress to pass a proposed $700 billion plan for the government to purchase troubled mortgage assets. Dave Ramsey tells Christianity Today why he is against the bailout and how Christians can prepare during an economic crisis. Ramsey’s show is carried on 350 radio stations nationwide, and he is the author of several personal finance books.

What do you think of the bailout?

I think it’s a disaster. It’s the largest government department ever formed in the history of man, and they are doing it in five days, and they are doing it based on a spirit of fear.

There are other things we could be doing to calm markets. All of the Bush administration appears to be in a dead dog panic. I’m afraid it’s going to pass, but that doesn’t mean we’re going to like it.

What do you recommend instead?

Change the market accounting rules. Do away with the capital gains tax, which will cause money to flood into the market instantaneously in 24 hours. Last, if we do need to do some insurance of some of these bonds, we can insure them rather than just buying them all. Only 7 percent of them are in foreclosure, while 93 percent of them are paying, so why are we buying them all—so we can make Paulson king?

Will the economical crisis affect how Christians will vote?

It translates into which person they think will go to Washington and give them the economy that they want. As a believer, I think that’s a mistake. I think we’re taught that God is to be our source. We’ve really got to stop looking to Washington to fix our problems. It obviously doesn’t have the ability to do that. People who are successful are not successful because of the President.

You meet people who think Sarah Palin is the Second Coming. People who say, ‘If we can get John McCain and Sarah Palin in the White House, everything’s going to be okay,” and it’s not.

Should this affect how Christians give? For instance, should Christians give to nonprofits that have lost money through investments?

I think giving priorities should never have anything to do with investments anyway. It should be the ministry that is doing God’s work, and what you feel God leading you to be attached to.

What will the crisis do to people’s lifestyle?

Hopefully some of this will scare people straight. Some of the consumption level will go down, some of the debt level will go down, and people will save more money.

God’s ways of handling money work: in the house of the wise are stores of choice food and oil (Prov. 21:20). Having cash on hand is a good thing, always having some money. Get out of debt; the borrower is a slave to the lender. These are things that worked 1,000 years ago, they worked 20 years ago, and they worked 20 minutes ago. They will work for the next 20 years.

The emotions in the last two weeks have been more related to fear that their bank is going to close, that somehow the mortgage company is going to take their house even if they pay their bills. The other emotion has been anger at the government for talking about passing this ridiculous bailout of Wall Street.

I don’t know that I have necessarily heard anyone say, “I’m now convicted to straighten out my life.” I think the net result is that when the emotional moment leaves, people will hopefully find some contentment in what they currently have and not have to constantly own something bigger and better just to feel good about themselves.

How can Christians prepare for something like this in the future?

Have money in savings, get out of debt, live on a budget, live on less than you make, don’t co-sign, and diversify your investments. These are things the Bible tells us to do with money. If you do these things, you’re going to survive in bad times and prosper in good times. I’m not sitting here fretting that my world is going to come to an end based on what they are going to do in Washington.

How should churches prepare for this?

When people get scared, they quit giving. We may have the lowest giving in the fourth quarter than we have had in a decade. Churches that are out of debt and have money set aside for emergency, biblically speaking, are going to survive. Churches that have no cash and are in debt are going to reflect some of these Wall Street companies. They have to adjust spending to be able to live on what’s coming in and anticipate a drop right now.

Hopefully when the flowers come out in the spring, we’re going to see some better times. The only proper way to look at financial markets is over the long haul. One hundred percent of the 10-year periods of the stock market’s history have made money, 97 percent of the five-year periods have made money. So don’t let the panic of the day set your life up.

Copyright © 2008 Christianity Today. Click for reprint information.

Related Elsewhere:

Culture11.com includes an article explaining how the financial system fell into a crisis.

Dave Ramsey talks about the bailout here. Ramsey is author of several books, including The Total Money Makeover and How to Have More than Enough. Ramsey was included in Christianity Today‘s article on Christian financial advisers.

Christianity Today has a special section on money & business.

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