Difference between revisions of "Debt"
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| − | '''Debt''' refers to an unpaid promise of [[payment]]. | + | '''Debt''' refers to an unpaid promise of [[payment]]. It is important to understand our own personal debt and how it is a cancer in our lives, strategies for debt elimination, how to avoid debt, and know under what circumstances debt is okay. It is also important to understand how entire [[monetary system]] can be debt-based, how a [[nation]]'s [[national debt]] effects us personally and larger systems of support, and alternatives to debt-based nationally [[fiat currencies]]. |
==Biblical References== | ==Biblical References== | ||
| − | The [[Bible]] refers to the matter of personal debt and deals with it in a matter of ways. Beginning with the [[Old Testament]], | + | The [[Bible]] refers to the matter of personal debt and deals with it in a matter of ways. Beginning with the [[Old Testament]], [[loan]]s and debts formed part of the [[economy]]. Loans could be made for a period of no more than six years (the interval between [[Sabbath]] years), upon which loans to fellow believers were forgiven. Debts to foreigners were excused from this release.<ref>[http://www.biblegateway.com/passage/?search=Deut%2015:1-3&version=KJV; Deuteronomy 15:1-3 (KJV)]</ref> This system of [[credit]] was revealed by God as a means to prevent [[poverty]], but was dependent on one's obedience.<ref>[http://www.biblegateway.com/passage/?search=Deut%2015:4-5&version=KJV; Deuteronomy 15:4-5]</ref> |
| − | In cases (prior to the next Sabbath year) where debts were owed and could not be repaid, it was possible for persons to become indentured | + | In cases (prior to the next Sabbath year) where debts were owed and could not be repaid, it was possible for persons to become [[indentured servant]]s in order to work off their debts,<ref>[http://www.biblegateway.com/passage/?search=Deut%2015:12&version=KJV; Deuteronomy 15:12]</ref> which prevented individuals from falling into [[bankruptcy]]. The book of [[Proverbs]] makes clear that the rich rule over the poor, and the borrower is the servant of the lender.<ref>[http://www.biblegateway.com/passage/?search=Proverbs+22:7&version=KJV; Proverbs 22:7]</ref> Because of this, individuals are also discouraged from pledging collateral for another person's loan.<ref>[http://www.biblegateway.com/passage/?search=Proverbs%2022:26&version=ESV; Proverbs 22:26 (ESV)]</ref> |
The New Testament discusses further the issue of debt, sometimes in a wider sense. In the [[Lord's Prayer]], [[Jesus]] instructed believers to "forgive us our debts, as we forgive us our debtors".<ref>[http://www.biblegateway.com/passage/?search=Matthew%206:12&version=KJV; Matthew 6:12 (KJV)]</ref> The reference is towards forgiving actions of sin, rather than monetary debt.<ref>[http://versebyversecommentary.com/2008/05/03/matthew-612/; Verse-by-Verse Commentary by Dr. Grant C. Richison]</ref> | The New Testament discusses further the issue of debt, sometimes in a wider sense. In the [[Lord's Prayer]], [[Jesus]] instructed believers to "forgive us our debts, as we forgive us our debtors".<ref>[http://www.biblegateway.com/passage/?search=Matthew%206:12&version=KJV; Matthew 6:12 (KJV)]</ref> The reference is towards forgiving actions of sin, rather than monetary debt.<ref>[http://versebyversecommentary.com/2008/05/03/matthew-612/; Verse-by-Verse Commentary by Dr. Grant C. Richison]</ref> | ||
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In the [[Epistle to the Romans]], the acquisition of monetary debt is discouraged altogether, and to be replaced with a debt of love toward one another.<ref>[http://www.biblegateway.com/passage/?search=Romans%2013:8&version=KJV; Romans 13:8 (KJV)]</ref> | In the [[Epistle to the Romans]], the acquisition of monetary debt is discouraged altogether, and to be replaced with a debt of love toward one another.<ref>[http://www.biblegateway.com/passage/?search=Romans%2013:8&version=KJV; Romans 13:8 (KJV)]</ref> | ||
| − | ==Personal | + | ==Personal Debt== |
| − | It is virtually impossible to go through life without incurring some personal debt. Such debt is commonly generated through taking out loans, often for a house or a car. Credit | + | Personal debt is when a person takes a [[loan]] that is a promise to pay back the amount of the loan plus [[interest]] in the future. Common reasons to obtain debt are [[education|college loans]], car loans, and [[mortgage]]s. It is virtually impossible to go through life without incurring some personal debt. Such debt is commonly generated through taking out loans, often for a house or a car. [[Credit card]]s are another source of debt. Where a debt cannot be paid in a specified time, [[interest]] is often added to the amount originally owed (the principal). |
| + | |||
| + | Until the [[Great Depression]], [[home loan]] practices were more consistent with the laws of [[Deuteronomy]], in that the maximum term of a home loan was limited to 5-10 years.<ref>[http://www.livestrong.com/article/78589-history-year-mortgages/ The History of 30 Year Mortgages]</ref> By the late 1930s however, changes to Federal legislation allowed for 30-year loans. This had the effect of increasing home ownership levels, but also increasing the amount of personal debt to a high degree. | ||
| + | |||
==National debt== | ==National debt== | ||
| − | |||
The United States has the largest national debt in the world.<ref>[http://www.visualeconomics.com/gdp-vs-national-debt-by-country/ GDP vs National Debt by Country]</ref> Regardless of this, [[Barack Obama]] borrowed more in the month of February 2011 ($223 billion) than [[George W. Bush]] did during the entire 2007 budgetary year ($163 billion).<ref>[http://www.realclearpolitics.com/articles/2011/04/14/asleep_in_dreamland_usa_109552.html ''RealClearPolitics: Obama's Dreamland'']</ref> | The United States has the largest national debt in the world.<ref>[http://www.visualeconomics.com/gdp-vs-national-debt-by-country/ GDP vs National Debt by Country]</ref> Regardless of this, [[Barack Obama]] borrowed more in the month of February 2011 ($223 billion) than [[George W. Bush]] did during the entire 2007 budgetary year ($163 billion).<ref>[http://www.realclearpolitics.com/articles/2011/04/14/asleep_in_dreamland_usa_109552.html ''RealClearPolitics: Obama's Dreamland'']</ref> | ||
Revision as of 07:14, April 15, 2014
Debt refers to an unpaid promise of payment. It is important to understand our own personal debt and how it is a cancer in our lives, strategies for debt elimination, how to avoid debt, and know under what circumstances debt is okay. It is also important to understand how entire monetary system can be debt-based, how a nation's national debt effects us personally and larger systems of support, and alternatives to debt-based nationally fiat currencies.
Biblical References
The Bible refers to the matter of personal debt and deals with it in a matter of ways. Beginning with the Old Testament, loans and debts formed part of the economy. Loans could be made for a period of no more than six years (the interval between Sabbath years), upon which loans to fellow believers were forgiven. Debts to foreigners were excused from this release.[1] This system of credit was revealed by God as a means to prevent poverty, but was dependent on one's obedience.[2]
In cases (prior to the next Sabbath year) where debts were owed and could not be repaid, it was possible for persons to become indentured servants in order to work off their debts,[3] which prevented individuals from falling into bankruptcy. The book of Proverbs makes clear that the rich rule over the poor, and the borrower is the servant of the lender.[4] Because of this, individuals are also discouraged from pledging collateral for another person's loan.[5]
The New Testament discusses further the issue of debt, sometimes in a wider sense. In the Lord's Prayer, Jesus instructed believers to "forgive us our debts, as we forgive us our debtors".[6] The reference is towards forgiving actions of sin, rather than monetary debt.[7]
In the Epistle to the Romans, the acquisition of monetary debt is discouraged altogether, and to be replaced with a debt of love toward one another.[8]
Personal Debt
Personal debt is when a person takes a loan that is a promise to pay back the amount of the loan plus interest in the future. Common reasons to obtain debt are college loans, car loans, and mortgages. It is virtually impossible to go through life without incurring some personal debt. Such debt is commonly generated through taking out loans, often for a house or a car. Credit cards are another source of debt. Where a debt cannot be paid in a specified time, interest is often added to the amount originally owed (the principal).
Until the Great Depression, home loan practices were more consistent with the laws of Deuteronomy, in that the maximum term of a home loan was limited to 5-10 years.[9] By the late 1930s however, changes to Federal legislation allowed for 30-year loans. This had the effect of increasing home ownership levels, but also increasing the amount of personal debt to a high degree.
National debt
The United States has the largest national debt in the world.[10] Regardless of this, Barack Obama borrowed more in the month of February 2011 ($223 billion) than George W. Bush did during the entire 2007 budgetary year ($163 billion).[11]
References
- ↑ Deuteronomy 15:1-3 (KJV)
- ↑ Deuteronomy 15:4-5
- ↑ Deuteronomy 15:12
- ↑ Proverbs 22:7
- ↑ Proverbs 22:26 (ESV)
- ↑ Matthew 6:12 (KJV)
- ↑ Verse-by-Verse Commentary by Dr. Grant C. Richison
- ↑ Romans 13:8 (KJV)
- ↑ The History of 30 Year Mortgages
- ↑ GDP vs National Debt by Country
- ↑ RealClearPolitics: Obama's Dreamland