Biblical Landmarks

Archive for the ‘Money & Finance’ Category

The sky is falling. Doom is near. Buy this or that stock. Buy gold. Buy anything that is a hard asset. Get rid of paper.

Why?

The economy is falling.

Why?

Because house prices have fallen.

So?

Bankruptcies are up.

So?

Doom is nigh.

That’s funny, I thought you just told me that house prices are falling? This means the purchasing power of my money in relation to homes has gone up. How is that a disaster?

Silence.

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A Mark of Sovereignty

From time to time there are news items explaining why some people find it necessary to leave home. Taxes — property taxes to be precise.

In a period of rising house prices, it is easy to forget that with rises in prices come increasing property taxes. And property taxes can mean financial ruin for many whose income cannot rise to meet the increased tax burden.

One resident in Massachusetts some time ago was suffering when her tax bill increased from $2,200 to $3,500, while income remained fixed at $12,000 a year. The result? Sell the family home, with all its sweat and tears (it was built by the current owner and her late husband) and memories.

While the stock market may be on the move up again and there is little evidence that the real estate market is out of the doldrums, the banking fiasco in the US, together with fevered home buying, indicated personal debt was on the increase. So, too, were home prices, since a good portion of the debt went into home buying. Property prices were bound to increase — and property taxes along with them.
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“The primary cause of financial struggle is simply not knowing the difference between an asset and a liability.” So says Robert Kiyosaki in his book, Rich Dad, Poor Dad.

Economic categories are no longer what they were. It is now common to hear government officials say that the revenue they did not receive was a “cost” to the government.

Imagine going to the company accounting system and entering an amount in the costs of the company for revenue that was not obtained. “Let me see, we should have had another $10 million this year. Let’s put that in as a cost to the business. Better still, make it $10 billion.”

And you think corporate fiscal accountability is bad. Read the rest of this entry »

The first argument against the use of debt is that the Bible tells us very plainly to avoid it. In a passage in Romans 13:8, the apostle Paul, writing under the inspiration of the Holy Spirit, tells us that we should “owe no one anything except to love one another” (Rom. 13:8a).

There are some, however, who argue that this passage is not referring to financial debt. Commentators are divided on the matter, and when the scholars disagree it is often difficult for the layman to form an opinion. Their position, however, is usually presented as a statement without supporting evidence. Read the rest of this entry »

Think about words. Without them you’d find it difficult to communicate with others (even though some people are quite articulate with their hands). What do words mean? Who decides what they mean? What is the origin of language? If language comes from God, as our doctrine of creation implies, then it follows that the meaning of words must also come from God. Our basic definitions thus should come from God and not from man himself.
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Proverbs 6:1-3 says the following: “My son, if you become surety for your friend, If you have shaken hands in pledge for a stranger, You are snared by the words of your mouth; You are taken by the words of your mouth. So do this, my son, and deliver yourself; For you have come into the hand of your friend: Go and humble yourself; Plead with your friend.” These words are an encouragement to anyone who has taken the position as guarantor for any debts that he should do everything in his power to get out of this obligation. While this is not so much a specific command against debt, it is certainly an instruction from God that makes borrowing much more difficult.
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In chapter six I discussed inflation and its causes. I argued that monetary inflation, an expansion of the money supply, causes price inflation. Monetary inflation, I also argued, was immoral, since it devalues the purchasing power of money as prices in the community rise. I pointed out that the two primary means of monetary inflation were using the presses to manufacture notes and coin and the creation of money through credit. It is this latter method of monetary inflation that we need to understand in relation to debt as well as in relation to biblical morality.
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In the first three chapters on this topic of debt, I described the wealth creation process. Mankind was created with the mandate to be fruitful, to be innovative, to be productive, to look after God’s garden, preserve it, husband it, and in so doing create wealth for all to enjoy.

More importantly, however, it was seen that the process of putting aside for future use (savings) was the necessary step for economic advancement. Without savings there can be no process of ongoing economic development.

Debt is the opposite to the idea of saving. Read the rest of this entry »

There is another argument against debt — or if not against debt as such, it at least requires a very careful self-analysis to make sure we are not guilty of simple greed. Debt can do at least two things for people. First, it permits them to buy goods for which they do not have sufficient cash right now. They don’t have the funds right now and don’t want to wait until they can save it. Or they think they’ll never be able to save the required amount, and don’t want to miss out on the goods. This has nothing to do with sound management at all. Rather, it is the manifestation of greed in the heart of man. This impatience, a refusal to wait until the funds are saved, is founded on an attitude of laziness and lack of self-discipline, often an inability to save for the future. Neither attitude provides a proper excuse to borrow money.
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Thus far our discussion has centered on those who borrow, and those who can benefit from debt, the sellers of goods. But there is yet another person who benefits from debt, and that is, naturally, the lender. Interestingly, the Bible also has some comments to make to the lender. The passage in Deuteronomy 15:1-11 places limitations on the actions of lenders. First, they are to cancel all debts to a brother in the seventh year. At the end of every seven years, the creditor is to cancel any outstanding debt. Second, this limitation did not apply to foreigners. Third, the requirement to cancel debts was no excuse not to lend to a brother in need. Fourth, the fact that the sabbath year was drawing close was likewise no reason to withhold assistance to a brother.
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