Come on, Ben, you could have made your title a little less negative, perhaps? Maybe… “Why Debt is Like Hot Coffee in Your Crotch”?
Whatever, I’m feeling cynical, as usual. And I really do hate debt. Here’s some reasons:
1) Debt is slavery.
It really is. The Bible says “The rich rule over the poor, and the borrower is slave to the lender” (Proverbs 22:7). Or maybe you prefer folk songs: “I owe my soul to the company store” (Merle Travis). That hasn’t changed in thousands of years.
I often hear people absolutely denouncing slavery in the traditional sense – we can’t own people, it’s morally reprehensible! And yet the more in debt you are, the less free you become. You can’t spend your money the way you’d like to, because there are serious consequences if you don’t.
And sure, we take the yoke of slavery upon ourselves willingly, because we want the house or the car or the clothes RIGHT NOW and don’t want to save for them. Which brings me to:
2) Debt’s “buy now, pay later” mentality is the enemy of careful saving and smart buying
When I was younger, if I wanted something extra (Christmas and birthdays excepted) I had to save up for it. You do remember what that felt like, right? You had to actually save and wait – maybe even months – to get what you wanted. During that time, you might have even decided that you wanted something else!
But our society promotes getting something now and putting off the payment until later. And then, because of interest, the rich companies and banks get even richer due to our impatience. And, speaking of interest…
3) Usury is evil, and interest compounds exponentially
Usury, or the charging of interest, was prohibited for the ancient Hebrews. Islam says of usury: “As for those who persist in usury, they incur Hell, wherein they abide forever”. That’s kind of bad. Early Christian ecumenical councils forbade usury, as did the Pope in 1745 (applied church-wide in 1836). Thomas Aquinas condemns the lending of money to make more money.
Why all the warnings about interest? It’s just a way of life, right? I don’t think so. I agree with the above sentiments – using money to make money is unjust.
Interest also compounds quickly. Einstein said that compound interest is the most powerful force in the universe. Albert Bartlett also said, “The greatest shortcoming of the human race is our inability to understand the exponential function.” Interest ruins lives. Sure, it makes some people lots of money. But where did all that extra money come from? Usury allows the rich to get richer, while the poor pay extra for the privilege of using money.
4) Debt has major consequences
Debt can contribute to depression and other psychological problems such as anger, fear, and stress. It can cause people to avoid marriage and is a major contributing factor in divorces. It is one of the primary problem areas for newlyweds. Debt can tear apart families and prevent them from forming. People even commit suicide because of debt.
If you’ve ever been up to your neck in debt (most Americans are), perhaps you will understand the feeling of being in a hole you can’t dig out of.
5) Debt artificially inflates prices
The availability of government loans for higher education has led to an exponential increase in costs. It’s created a bubble with the students left with *non-bankruptable* debt. The government stands to make billions on these loans ($50 billion in 2014), and colleges are also reaping the benefits.
Similarly, the prices of land and houses can be more than the actual value because people can take out 30-year loans. By the end of that long mortgage, you are paying three or more times the price – to banks. The banks get richer from your work – over 30 years – simply because they have money and you don’t. And as this video shows, they do it with money they do not have in the first place. Add up millions of mortgages, and you have usury on a grand scale.
What if we all could buy houses and cars with money we actually had? Think of all the money we’d save! Heck, think of all the TAX money we’d save if the government was not in debt to banks!
6) Someone always loses
I’m no economist, but I have read that our system of usury cannot sustain itself indefinitely. Some people always lose because it’s not possible for everyone to pay back everything. This article explains it better. And since interest can contribute to higher inflation, we ALL lose in the long run as the rich get richer from interest.
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So what is the solution here? For the large scale, I don’t know. On the personal scale, Jill and I have no debt. This contributes to the strength of our marriage and allows us to be more generous. We’re free to do as we want with what we make (other than taxes). We do not pay interest to credit card companies or banks. My personal credit rating is zero, and I like being off the radar (it was in the 900s a few years ago). I wish everyone could live like this – it’s very freeing, and we’re thankful.
“Let no debt remain outstanding, except the continuing debt to love one another…” -Romans 13:8
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