Debt Isn’t As Bad As You Think

Debt Isn’t As Bad As You Think

A troublesome economic climate has suffocated the United States over the last few years and we’ve seen some giants fall flat on their faces. In the midst of government shutdowns, big bank failures, and automaker bailouts, the American middle class has suffered the consequences of irresponsible accountants, politicians, and business leaders. As a result of the recessed economy, we’ve seen a reemergence of some interesting financial philosophies. We might be short on cash and jobs but we still have an abundance of financial advice. That advice goes something like this:

Don’t buy a house! Don’t use credit! Don’t buy stocks! Buy used! Live frugally! Shampoo is better!

With mortgages underwater and foreclosures on every street, this advice makes a lot of sense. A lot of people are working really hard to get out of debt – a trap that can keep you in devastating bondage for the rest of your life if you aren’t careful. My hope and prayer is that those people succeed. Meanwhile the financial revolution is well underway, and as a result many are fighting back against debt. But could that be a bit of an overreaction?

I’d like to propose it is (an overreaction). As humans we tend to move from one extreme to the other. It’s our natural instinct because we are typically irrational, and therefore the concept of moderation can be a difficult one to grasp. We see markets crash and immediately insist that all credit is bad – just like we hear about one act of violence on TV and think the whole world has gone mad (mean world syndrome). But the truth is debt itself is not bad – too much debt, or rather bad debt, is the problem. I’d like to propose we don’t throw out good debt with the bad.

Debt is an extremely valuable resource for businesses. Without access to credit, most small businesses would quickly fail – it takes money to make money. In fact credit is so important that our government does all sorts of tricks to make sure credit doesn’t dry up. Like anything, debt can be used for good or evil. Debt in itself is not inherently bad – only when we choose to use it inappropriately does it become a problem.

Bad debt, on the other hand, is something to worry about. The Bible warns against it extensively. Proverbs 22:7 says, “When you are in debt to another, you enter into a slave/master relationship with your creditor.” While the Bible doesn’t say debt in itself is a sin, it does highlight the reality that as one in debt you become enslaved. What God really dislikes though is a borrower who doesn’t pay back what is due. Psalm 37:21 is evidence of a pervasive theme in scripture: only the wicked borrow without returning what they owe.

As our country continues to stumble on economic policies, it is important that Christians have a clear understanding of God’s heart as it relates to our finances. We as a nation have significant debt that goes wickedly unpaid – a trend that we also show no remorse for. This is not a pattern to model in our own lives. Instead, we must carefully measure our own lives according to God’s truth. We must use scripture as the measuring stick for reality, not the economic tendencies of our government.

My goal in writing this post is not to tackle the Biblical issue of debt. I am, however, seeking to inspire you to do your own Biblical research about the topic. I’ve seen Christian business professionals and entrepreneurs scared away from what I believed were heavenly ordained ventures because those Christians had an extreme view of debt that was distorted one way or another by the world instead of being properly formed by scripture.

I’m not telling you it’s a good idea to buy something you can’t afford, take out a loan bigger than you can pay back, or max out your credit card. You should live within your means. But you must also remember that debt can be an asset, that when properly leveraged, will bear fruit and enable you to succeed as a Christian business professional or entrepreneur. That success enables you to transition from the borrower to the lender, a position the Bible describes as a state of blessing:

“The Lord will open for you His good storehouse, the heavens, to give rain to your land in its season and to bless all the work of your hand; and you shall lend to many nations, but you shall not borrow.” – Deuteronomy 28:12

Photo Credit: woodleywonderworks (via Flickr Creative Commons)