Debt

The Cycle of Debt & A Salt Free Diet


“If you do not have economic freedom, you are not free.” This is not my quote, but came from a gathering I attended some years ago. I do not remember who said it, but it has stuck with me for many years, — decades in fact. I was reminded of it, again, when reading Proverbs 22:7. “The rich ruleth over the poor, and the borrower is servant to the lender.” In verse 5, two versus prior, we are warned that, “Thorns and snares are the way of the froward.” The use of the word “froward” here means crooked or perverse. This is the reason that training our children in the way they should go, spoken of in verse 6 is so important. The use of wisdom and good judgement will assist them to discern the motivations of those they conduct commerce with and trust with the affairs of governing.

That being said, why is a nation originally rooted in the Judeo-Christian ethic riddled with debt, both public and private? We are talking about the United States. Someone being born in the early 50’s can remember 25-cent double features, 19 cents for a gallon of gas, and 5000-dollar homes. One of my favorites was a dozen maple bars for $1. A big celebration was to have a note burning party when the mortgage on the house was paid off.Now, a single movie is upwards of $10 to $15, gas is $2.65 to $3.00 plus a gallon, and as of February 2017 — the price of the average single-family dwelling is

Now, a single movie is upwards of $10 to $15, gas is $2.65 to $3.00 plus a gallon, and as of February 2017 — the price of the average single-family dwelling is $270,800. Having a home now requires multiple income streams, and young people are having fewer children. Last year, birthrates fell to 59.6 per 1,000 women. That is the lowest on record. This does not bode well for our future. It is basic math: “The fewer young, productive people you have to pay for entitlements for old, unproductive people, the steeper the bill for the entire society becomes.

How many around you are surprised at our nation’s collective comfort with debt? Our representatives are addicted to it. They remain silent of the threat to future generations and our freedom. They fear that if the punch bowl provided by borrowing on the future is removed, they will not get re-elected. As a result, public debt doubled to just under 10 trillion under the Bush Administration, then doubled, again, to almost 20 trillion in the Obama Administration. For the general public, it has become a lifestyle. It is no longer fashionable to pay off a home. It is looked upon as an investment to refinance, and use as a private ATM. Since 1950, private debt has gone from 55% to 150% when measure against GDP. This is a tripling of “real” debt load for the average citizen. We seem trapped in a cycle of never-ending debt with no intention of ever paying back what is owed, and ever-inflating asset prices to carry the day.

The following is harsh, but will quote from Isaiah 1: 21-23. (21) “How has the faithful city (nation) become a harlot! It was full of judgement; righteousness lodged in it; but now murderers. (22) Thy silver is become dross, thy wine mixed with water. (23) Thy princes are rebellious, and companions of thieves: every one loveth gifts, and follow after rewards: they judge not the fatherless, neither doth the cause of the widow come unto them.” There are multiple parallels that could be drawn here, but we will focus on “silver,” “wine,” and “princes.” This is a vision of a nation that has lost its way. Both gold and silver are mentioned in the Bible. Gold was the money of kings, but silver was the money of commerce. It was the most widely used form of money for trade and industry. Here, it says the silver has become “dross.” Dross is a reference to a solid mass of impurities. In other words, impurities in the form of base metals, — lead, tin, zinc, — have been mixed with silver making it less valuable. A reference to watered down wine is mentioned, also, — it too, becoming less valuable. Note that the “princes,” those that govern, have become rebellious, and are referred to as “companions of thieves.” Those whom govern love gifts and rewards more than the fatherless and widows.

One can see that the concept of debasing a currency is nothing new. From the Christian perspective, it is a sign of corruption. When a nation becomes corrupt in its money, it spreads to all commerce. “The Federal Reserve System (Fed) judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures (PCE) is most consistent over the longest run with the Fed’s mandate for price stability and maximum employment.” The question is, “What does 2% inflation do to a currency over time?” Answer, — because of compound interest, a currency loses 100% of its purchasing power in 35 years. So why must we have inflation always and everywhere? Answer, — because inflation benefits the debtor. It is necessary for the continued financing of ongoing debt. If deflation were to kick in, assets become impaired, and asset bubbles burst, — as what happened in the 2008 housing crisis. At this time, the only saving grace is the dollar is measured against a basket of currencies, — which are, also, being debased simultaneously.

What a mess! Corruption has spread to all commerce. Currency wars are nothing more than trade wars. “Beggar thy neighbor” becomes policy, and currencies are constantly manipulated in order to gain a trade advantage. Meanwhile, the average middle-class American wonders why they work harder for less. Is it no wonder, — it is policy! As a result, — trade deficits have grown for 30 plus years, and the US goes deeper in debt. This will end. When? No one knows, but when it does, — Katie bar the door.

The ability to borrow has allowed for the continued expansion of a strong central government and expanded services to the public. It has given our representatives the ability to make promises that, otherwise, could not be kept. It has, also, allowed the US to engage in never ending conflicts around the world for a never coming peace. Centralization of money, and the power that it brings, has attracted many who wish to influence where the money goes, conflicts we engage in, and regulations that impact our lives. Temptation is a terrible thing when there is access to an unlimited amount of money, — and make no mistake, money is power. The peddling of influence is big business. Incentives of gifts and reward can and do play a part in decision-making. That which is given to us in one hand, is taken away from us with the other through inflation. The distortions created by currency debasement may benefit asset prices and special interests, but creates problems in real income and purchasing power for the average American. Put simply, purchasing power declines over time. The result, — young people chose to remain childless, and the elderly’s fixed income provides less. When writing this essay, I found it curious that the term “fatherless,” mentioned in Isaiah 1:23, can be taken to mean “men choosing to not have children,” thus are “fatherless.” It could, also, be taken to imply that men leave their families resulting in “fatherless” children. Bottom-line, financial strain promotes both.

What Isaiah saw in his vision is a nation that had become corrupt. It had abandoned honest and just weights and measures by debasing its currency. This was done to give the illusion of wealth. The ruling elite did not serve their people, but instead — were themselves governed by corruption. Princes catered to thieves who assisted them in looting the treasury, and the people. All of this was an act of rebellion. I seldom hear any alarm from my Christian acquaintances, and little to nothing from the pulpit. Mathew 5:13 — “Ye are the salt of the earth: but if the salt have lost his savour, wherewith shall it be salted? It is thenceforth good for nothing, but to be cast out, and trodden under foot of men.” We, as Christians, are called to be “salt,” as well as light. Where is the salt? I contend that most Christians in America are on a “spiritual salt-free diet.” As a result, we live at the whims of men and do little that influences the culture. The salt of our walk is being trampled underfoot. The inheritance “good men” are to leave their children’s children (Reference: Proverbs 13:22) is being squandered. I pray that my Christian brethren open their eyes, begin exercising their responsibility to be salt, and start influencing the current American culture for good. We need to make our way out from the “thorns and snares” that have been laid before us, as the direction we are now headed is simply unsustainable.