Every now and then my credit card company sends us a nice letter telling us that they have just raised our card limits or credit card debt ceiling.
We have neither asked for this nor have needed the limit raised. The primary reason is that many years ago we made a commitment to stay within the limits of our budget and not spend more than we could pay off within 30 days thus avoiding compounding interest. By and large we’ve been able to do that over many years.
This makes us low risk to the credit card company which is why they want to let us borrow more money from them. In other words they raise our debt ceiling without us asking in order to encourage us to borrow more knowing we are a good bet to pay it back possibly with just a little more interest because we may have to carry over a balance from month-to-month. Nice of them, don’t you think? They make it look like they are rewarding us for being a good risk and at the same time encouraging us to spend more.
It wasn’t always so with my wife and I. But we learned, by studying what the Bible said about economics that the first step in fiscal/debt matters is to take personal responsibility to pay your debts starting with the smallest one first and then chipping away at the rest. The interest savings are considerable but it requires fiscal discipline and a stick-with-it attitude to get anywhere.
There’s at least two biblical principles which come to mind that speak to debt. The first is the rich lender (like a credit card company) rules over the poor[er] making the borrower a slave of that lender (Pro, 22:7). This can be illustrated from what a collection agency does. If you default on your debts you are hounded remorselessly and your credit rating is eventually trashed. That’s slavery and you were quite willing to put yourself under those conditions. I think collection agencies are remorseless but I have little sympathy for those who put themselves under that kind of slavery.
The other principle that comes to mind is the making of a covenant (contract, legal agreement, etc) with the credit card company. If you borrow money from a credit card company you are making a covenant to pay it back. If you don’t you are not as good as your word. Paying off a debt then becomes an integrity issue. Bank bankruptcy is thought to be a protection but it’s not biblical. What it is, is a legal way to avoid the responsibility of fulfilling your end of the contract.
I think these basic principles would make a lot more sense to more people if our federal government took them seriously and set an example. They often talk like they take these principles seriously but when it comes down to action they raise the debt ceiling and raise the debt (and usually taxes) that results in the US being a slave to the foreign countries that do the lending!.
Look what then Senator Barack Obama said back in 2006 when the Senate was going debate raising the debt ceiling (again). George W. Bush was President at the time.
“The fact that we are here today to debate raising America’s debt
limit is a sign of leadership failure. It is a Sign that the US
Government cannot pay its own bills. It is a sign that we now depend on
ongoing financial assistance from foreign countries to finance our
Government’s reckless fiscal policies. …Increasing America’s debt
weakens us domestically and internationally. Leadership means that ‘the
buck stops here’. Instead, Washington is shifting the burden of bad
choices today onto the backs of our children and Grandchildren. America
has a debt problem and a failure of leadership. Americans deserve
better.” SENATOR BARACK HUSSEIN OBAMA, MARCH 2006
The quote emphasizes the leadership failure in what it means to pay off debts and responsibly not spend more than one has. Obama alludes to the slavery of borrowing from foreign countries. It’s a great quote and is biblical wisdom.
Yet today the President expects that the Congress will automatically raise the debt ceiling. He made the comment that raising the debt ceiling does not mean increasing the debt.That would be true if the federal government treated the issue like I treat my credit card when they raise my debt ceiling. But they never have and probably never will. Both sides of the aisle raise the debt limit so that they can borrow more. They pay lip service to sound biblical principles and then turn around and do the exactly the opposite.
China and Japan are the US’s biggest lenders. The are warning us of what will happen if we don’t raise our debt ceiling. Slavery on one hand and a lack of integrity on our part on the other hand have gotten us into this mess.
We are reaping what our politicians have sown. Correction: We are reaping what we have sown because we keep electing politicians who are more about pragmatism than they are about principle. Maybe it’s true and we get the kind of government we deserve.
Here’s a link to a book that proposes solutions. Mark Leven, The Liberty Amendments
- Obama: The Original Tea Partier (ireport.cnn.com)
- Debt 101 – Debt Limits for Dummies (sueannporter.com)
- Democrats’ Debt-Limit Doubletalk (ivoter.com)