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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 1–5 of 14 comments

Gary Moore

October 30, 2012  4:58pm

The most intelligent discussion of debt that I've read since Bruce Howard of Wheaton's economics department wrote "Safe & Sound" and said debt is entirely compatible with traditional Christianity. Evangelicals would do well to read Calvin and Luther's perspectives on debt in addition to perspectives from credit management ministries. The Reformers essentially nuanced "consumer" debt as potentially dangerous to the borrower but "productive" debt as potentially enriching to both borrower and lender. They therefore made banking and capitalism possible. Few evangelical financial ministries are as nuanced as they base their teachings on the Bible, which is entirely about the consumer debt that enabled peoples of biblical times to survive. The question about governmental debt requires similar nuance. The increase in federal debt to win WWII and previous wars was likely moral. One to provide the electorate everything it wants but refuses to pay for through taxation would likely not be.

Roger McKinney

October 25, 2012  8:27am

Nicely done! One of the main principles of hermeneutics is to understand the cultural setting of the verse. The economies on the Bible were vastly different from those of today. We have learned a great deal about how economies work just as we have advanced medical knowledge. In Biblical days the only way to help the poor was through charity. For the past 300 years we have known that investment (through debt or equity) creates jobs and helps the poor more than charity.


October 23, 2012  11:38pm

Your story is quite compelling. The ability you had to affect the lives of so many children is great. The problem I have is that in contrast to your story of success with debt there are just as many, if not more, stories of failure. Had the risk you taken not "worked out", that debt would have hung around you and your company's neck dragging you to the bottom of the sea. Shining example of a company not utilizing debt is Apple. They can afford to lose money on 9 out of 10 ideas that lead to the one big hit. The no debt philosophy has brought them tremendous capitalization. God Bless.


October 21, 2012  10:41pm

And I suppose the bible is not a handbook commanding us to stay away from adultery, lying, stealing, trouble-making, telling us to raise our children in a godly manner, or how to avoid many other ills. So how about we just forget about any instructions in the bible about how to think, act, and live? It is amazing to me that people can think the scriptures point to Jesus, yet they don't understand that they are also part of His instruction to us so we know how His Spirit will lead us to think, act, and live. I hope we all finally get it one day!


October 13, 2012  6:58pm

Even Romney, a non-Christian, called our debt situation a moral issue. I see it roughly in two contexts: 1) individually; and 2) corporately; e.g. nationally. In both cases debt is a claim on future prosperity, earnings, or wealth. When we know this debt can't realistically be discharged in our own lifetimes we should really be questioning the morality of placing it on our future children, great grand children, etc. Most of us who expect the govt. (i.e. us taxpayers) to do many things for many people don't want to honestly look at the cost. Similarly, while the govt. and banks were the principle parties to our recent and ongoing debt crisis; it took people's desires of greed, material fulfillment, etc. to fuel it. Underneath it all is a bed of lies, if you will; e.g. the true state of Social Security. As Christians we need to be very careful how we focus our lives and what we do to point others toward Jesus - I don't see debt helping here.


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