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The Moral Case for Debt

The Moral Case for Debt

Why borrowing money is crucial to pursuing the common good.

If "debt" were a brand today, it would be in roughly the same place as Tylenol was in 1982, when the drug was pulled from the market due to concerns over tampering. In other words, debt would be associated with lethal toxicity and a corresponding loss in the value of the brand. "Collateralized debt obligations" and the fallout from their collapse in value have nearly brought down the economies of the developed world since fall 2008. Greece and Spain have become synonymous with excessive government spending and unsustainable debt levels, the national U.S. debt level is a critical issue in the 2012 presidential campaign, and student loans have reached levels where many are asking whether they'll be the next "bubble."

Amid these sobering developments, many individuals have sought to reduce their debt levels, while businesses have found it harder to get debt financing to expand their activities. This helps explain why recovering from the Great Recession has been sluggish. It also helps to explain why bankers are viewed by many as the moral equivalent of tobacco farmers: practicing a legal trade that profits from the ill effects it generates for others.

It's hardly surprising that a discussion of debt in our economic system elicits a variety of theological responses, all of which appeal in some way to biblical authority. Among theological conservatives are groups like Crown Financial Ministries (the successors to Larry Burkett, an evangelical voice who advanced a similar agenda late in the 20th century). Crown emphasizes reducing or eliminating individuals' debt as part of an effort to immunize Christians against the effects of financial crises. Among theological progressives are groups like the Presbyterian Church USA, which has tried to move money from the large banks associated with the foreclosure crisis, and called for a fundamental change in the global financial system, all in the name of biblical justice. In the meantime, businesses large and small continue to need capital, and Christians engaged in such businesses (or, for that matter, banks) need to understand how the Bible might apply to debt in the context of our modern economy.

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Displaying 1–4 of 4 comments

bennett willis

October 11, 2012  2:54pm

The great majority of our debt is owed to Social Security. However some of it is borrowed from other countries. This is not a justification for taking on more debt but just a fact. The last dollars of debt is indeed borrowed from people or governments in another country and as Social Security pays out the money that the program is currently owed, the debt will have to be replaced with money from other places.

sarah farrar

October 11, 2012  1:57pm

Mr Clarke : You gotta be kidding. The obscene $16 trillion debt we have saddled future generations with is tantamount to 1. Taxation without representation 2. Indentured servitude to foreign governments from whom the money was borrowed. I am thrilled that you could make a wise business decision about debt---a calculated decision knowing that you could probably repay that money borrowed from banks who agreed that you would be able to repay it. Compare that to our corrupt, irresponsible politicians borrowing from foreign governments who KNOW we cannot possible repay or even pay down such debt any time soon. So. How much IS a trillion? One million seconds = 12 days One trillion seconds = 31,688 YEARS. YEARS! www.swineline.org/media Remember that on Nov. 6th.

Jerome Ellard

October 11, 2012  1:43pm

The author's vaccine company took on debt as a calculated method of becoming productive and successful - which it became. The mountain of debt owed by the Federal Government (read our children and grandchildren) was incurred in order to buy political favor under the guise of "helping people." Though people were "helped," the net result of the enterprise has been no change in the poverty rates, nanny-state dependence at the expense of fatherhood, and a bloated bureaucracy consisting of government union employees with no purpose beyond maintaining the gravey train. Inefficient, counterproductive and ultimately a disaster for every one of us. There has to be a better way.

Rick Dalbey

October 11, 2012  1:12pm

Is this argument for debt supposed to make us feel good about 16 trillion of debt, borrowing vast sums from the Chinese, failed stimulus packages, Government loans to Solyndra, mortgaging our children's future? Cuz I'm not feeling it. To say that debt is much easier to incur and has less draconian penalties than Biblical days is reckless and there is a train wreck coming for us all that will make 1929 look tame.

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