Addicted to Debt

Owe nothing to anyone except to love one another… (Ro.13:8).

The Bible is not primarily a book for us to be inspired from. It is a set of God’s orders to His covenant people, and all of life is covered by its commands.

Debt is a serious issue for individuals, families companies and nations. Days of reckoning are going to come to the western world throughout the next generation, because of our levels of indebtedness. These will be both personal, local and national, affecting both individuals and governments.

Take the United States. Recently, the Treasury Secretary, Timothy Geithner, wrote to the Congress, pointing out that,

in February of 2010 Congress passed legislation to increase the debt limit to $14.29 trillion. As of this writing, the outstanding debt that is subject to the limit stands at $13.95 trillion, leaving approximately $335 billion of ‘headroom’ beneath the current limit.

If we are forced to do so again, these measures could delay the date by which the limit is reached by several weeks. Once these steps have been taken, no remaining legal and prudent measures would be available to create additional headroom under the debt limit, and the United States would begin to default on its obligations…

The Treasury Department now estimates that the debt limit will be reached as early as March 31, 2011, and most likely sometime between that date and May 16, 2011.1

Niall Ferguson is a well-spoken and internationally acclaimed English professor. His strength is history, and specifically, the application of economic thought to international affairs.

Recently in Australia, and speaking at the Centre for Independent Studies (CIS), he indicated that imperial crises historically, are associated with fiscal crises. Great Empires collapse because they run up debts, and get to a point where the burden of debt and its repayment, is unsustainable.

He used four historical examples:

1. Spain under the Hapsburg monarchy.

2. France in the eighteenth century, which succumbed to revolution.

3. The Turkish Ottoman Empire in the late nineteenth century, which collapsed in 1918.

4. The British Empire.

In each case, he pointed out that the central factor in the collapse of an Empire was its unsustainable national indebtedness.

But Ferguson wasn’t interested in merely handing out a history lesson to his listeners. He wanted to point out that this scenario is being played out today, in the Empire of today-the United States.

The U. S. deficit for 2010 is $1.7 trillion. But this year’s deficit is only a pimple on a pumpkin. Every year for over sixty years, the U. S. Government has been spending more money than it takes in. One estimate is that for every $2 is receives in taxation, it spends $3. Thus the on-budget debt today is over $14 trillion, rising by $2 million each minute, while the un-funded (off-budget) debts are over $70 trillion.

The statement attributed to Dick Cheney, George W. Bush’s Vice-President, was that “deficits don’t matter.” Try telling that to your bank manager.

When nations are seriously in debt, it is not merely a governmental or a political problem. It indicates that the community is no less foolish than its political leaders. Political leaders who get their nation into debt, are generally responding to their electorate, who want something now, for nothing.

Thomas Jefferson said,

I place the economy among the first and most important virtues… and public debt as the great danger to be feared. To preserve your independence, we must not let our leaders load us with perpetual debt. We must make our choice between economy and liberty… or profusion and servitude.

At the end of the day, there is no such thing as a free lunch. It is the epitome of folly, and leads to economic disaster, when people think their governments can provide something for free. Indebtedness is thus more than a financial or an economic problem; it is at heart a moral problem.

The debtor effectively becomes an addict. It is easier in the short-term for an addict to continue his habit, be it alcohol, or heroin or whatever. To confront his problem requires a painful change of lifestyle; he has to stop indulging himself.

But every procrastination, every failure to face up to the consequences of indebtedness, or addiction, only confirms the decline and ultimate destruction of an individual, a family, a company or indeed, a nation; they finish up in the gutter.

In Ro.13:8, we find the principle of New Testament debt:

“Owe no one anything except to love one another.” The Old Testament allowed short-term debt, but the New Testament warns us not to have any debt whatsoever. God tells us not to serve two masters. He therefore tells us not to indulge in debt relationships, so that we can maintain our position as free men. The modern world has ignored this rule, and the modern world faces economic devastation because of its rebellion with respect to debt. We need to understand God’s warning against debt bondage if we are to preserve our personal freedom.2

Now it’s easy to be critical of nations around the world. There are plenty of them, and their failures are legion.

But what about me and you? Are we living obediently to God’s Word, are have we made a decision like Dick Cheney, that “deficits don’t matter?”

Bearing in mind what the scripture says, what should we do?

1. Follow the GOOD principle: Get Out Of Debt.

2. Determine to live debt-free.

3. Tithe to your local church.

4. Work hard and productively, and live frugally: our circumstances are subject to change.

5. Invest wisely, and include in your assets those that are likely to be valuable in a time of crisis, such as silver and gold.

Only by assuming our responsibilities under Christ to exercise dominion in every sphere can we have godly order and freedom. A responsibility surrendered is slavery assumed.3

Conclusion: I understand that the Chinese have a blessing: May you live in interesting times. A collapse of an empire is certainly interesting, but it can also be fraught with great uncertainties, and danger. In fact, even the well-prepared will have their surprises.

But for the Christian person, these should be times of great confidence. Why?

God has been in the business of actively bringing down arrogant, humanistic empires for thousands of years, and we should be reminded that in the midst of all, God is establishing His kingdom. The Bible says that, “the nations made an uproar, the kingdoms tottered; He raised His voice, the earth melted” (Ps.46:6).

The Bible warns us about the dangers of indebtedness, but promises us that God wishes to give His inheritance to His people: “Do not be afraid, little flock, for your Father has chosen gladly to give you the kingdom” (Luke 12:32).

When the Church obeys Him, there are promises for us to claim:

“Now it shall be, if you diligently obey the Lord your God, being careful to do all his commandments which I command you today, the Lord your God will set you high above all the nations of the earth” (Deut.28:1).

The Church will thus, have great opportunities for responsibility and influence in the future, as it obeys the Lord.

1 Quoted in “The Daily Reckoner,” ‘Eleven Weeks to Avoid Default,’ 10/1/2011.

2 North, G., “Inherit the Earth,” 1987, p.97.

3 Rushdoony, R., “Deuteronomy,” 2008, p.247.

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