The Day That Debt Stood Still

Once upon a time, in a nation not unlike ours, there was a decree that came down upon all of the subjects: “Henceforth, there shall be NO MORE DEBT!!!”

What a glorious day that was! Imagine the thought of a country where no new debt was allowed. Everyone could focus their efforts on paying off existing debt, and then economic utopia was sure to follow.

What did “no more debt” mean? Simply put, it meant that nobody could make a promise of their future labor, or the future labor of others they controlled, to anybody else. That sounded like “hope and change” that everyone could get excited about.

Every economics show on Christian radio was abuzz with this wonderful news! Radio talk-show hosts shouted “FINALLY – people FINALLY understand the dangers of debt!”

Let’s follow the pathway of this nation as they proceeded along their new economic “enlightenment”.

Workers woke up bright and early the Monday following the announcement. The “economic engine” of the country was about to show its might and power! People spent their entire day working diligently on their various tasks – and had a sense of completeness as the day drew to a close. There was a lot of “completed labor” accomplished by a whole lot of people. Surely the economic health of the country went up a notch following those efforts!

This continued on all week. It had been a long time since people were so hopeful, so cheerful, so excited about the future.

Payday came. Companies transferred some of their money to their employees in the form of payroll. Some manufacturing companies found out that they did not have enough money to pay their staff. After all, they had always allowed their vendors 90 days to pay their invoices. There were not enough “accounts receivables” coming in the door to make ends meet. These companies had relied on “commercial paper” (short-term loans) to bridge the gap, but now – NO NEW DEBT!!! Oh well, a job reduction of 25% quickly brought the accounting back into line for the time being.

Those fortunate enough to get paid raced to the banks and deposited their paychecks. They needed to make sure that their mortgage loans, credit card payments, auto loans, etc. were all paid on time. That sure was wise of them, since getting hit with late payments is an awful way to pay down debt!

Hundreds of millions of dollars of debt was repaid over the first weekend. What a great first cut into the nation’s massive debt pile! Things were definitely looking up! Even the US government couldn’t create new debt! WOOHOO!!!

This exact same enthusiasm was repeated for a number of weeks.

There came a time when a few individuals began to feel the first signs of a small gnawing feeling within their gut. Everything was wonderful – but something didn’t seem quite right. Was it the stoppage of all US Treasury security auctions? No, it couldn’t be. How about the growing unemployment numbers that were beginning to appear? No…companies that could only survive with debt financing deserved to go out of business. Those unemployed people were just a by-product, and should have been wiser when choosing their career path.

Another few months wore on.

People began wondering why something that was supposed to be so terrific felt so awful. Why were so many companies shutting their doors? Why were there constant “blow-out” sales in all of the stores, doing anything they could to win customers?

Why????

It was the following Monday morning when a faint glimmer of realization began to appear. Remember all of the people who had been working so hard? Remember all of the loans that were getting paid down or eliminated? All of that was absolutely DESTROYING the nation’s money supply!

What????

“Debt” is a promise of future labor. “Money” is a claim on that promise of future labor. When labor gets “completed” through a full day’s work or the principal amounts paid on loans then there is “no more promise on that future labor”. What does that mean? It means that the amount of “money” that the completed labor represented went away. It disappeared – never to exist again! And since no new debt could be created then no new claims on new debt could occur. “Money” was being destroyed daily with absolutely no way of replacing ANY of it.

The country in our story was economically destroyed. It eventually devolved into riots, anarchy, and murder.

Whoaa!!!! Brad, are you saying that debt is good? Are you saying that we should get into even more debt in order to have a “healthier” nation? You confuse me!

Let me be very clear. Debt is very bad. It makes the person promising the debt (future labor) a slave to the person claiming the debt as “money”.

This is where I strongly believe that the Christian community has it extremely wrong. We are out there teaching people to get out of debt, which is a noble and just exercise. However, there are many (some followed by tens of thousands) who don’t realize the absolute economic calamity that would occur if everyone took their advice!

Getting out of debt is a very important step (even though it can never, ever be totally accomplished in our current economic structure since all “money” is simply a claim on debt (future labor). The best we can strive for is eliminating our “personal debt” which we have previously voluntarily entered into. But getting out of personal debt is just a step – it actually accomplished very little in the grand economic scheme of things.

If we as Christians fail to address the underlying basis of “debt” driving our economic future then we can look forward to even more debt-slavery at the hands of tyrannical masters. Yes, our personal debt may be paid off, but it won’t matter. The shackles will already be in place on us and our progeny.

Brad, that’s depressing!

No, it’s truth. And very few are writing and/or speaking it these days when it comes to economics.

How can our nation turn around economically? First we need to pray fervently for God’s direction. I do not just casually write these articles. I pray about them. I ask God for wisdom and guidance in writing them, and I honestly seek to give God 110% of the glory if anyone is aided by them. I consider myself a cracked clay vessel who desires to serve his true Master. Sometime I’ll relate the story of how I came to that realization and desire.

If we’re going to have a national money supply then it needs to be based on the biblical concept of “completed labor”. What do I mean by this? Our physical money is currently backed by debt (mainly US Treasury securities). This needs to change. The US Treasury will need to issue our money if we desire national currency. There would then be no need to issue new debt (claims on future labor) against it.

Some say that we can’t trust the US government with issuing our currency. We’re told that we can’t trust them. I don’t seem to recall Jesus condemning the currencies produced by the Jew, Greeks, and Romans. Maybe we might be better off if we tried it and wrested control away from the international bankers keeping all of us as debt slaves. Maybe, just maybe, God might richly bless our efforts at following His Word when it comes to how we manage our nation’s economics.

Debt (loans) needs to go back to the dark alley it once was a part of. Christians should seek to have no part of it. Does this mean that we have to save 100% for everything that we need/want? No. It means that we would need to find others that see the value in what we’re after, and would be willing to part with some of their money (based on completed labor)…..also known as true “capital”….in return for a “piece of the pie”.

Maybe someone would want to buy a piece of property for $100,000, but only had $20,000 to put towards the purchase. Four other investors might be willing to put in $20,000 each in return for possible profit during a future resale. That is biblical investing.

Getting out of personal debt while mired in a debt-based economy is a losing proposition in the long run. We are still debt servants to many masters.

Praying for God’s mercy to heal our nation, seeking true repentance of our many sins, and putting action to our words is the only “hope” that we have for “change”.

Your comments and questions are welcome…

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