Wednesday, 22 August 2007

The Debt Disaster: An American answer

Ed: Typical - we have a problem, the Americans find an opportunity. Despite the author's caveats (which I feel are a bit overdone in alleging this leads to Pelagianism) this is a useful article.

[...] Ramsey often tells the story of how he made and lost a fortune in real estate in his 20s before determining to learn how money really works. He told Christianity Today last year that "a whole bunch of us got all this stuff we really didn't want with money we really didn't have to impress people we really didn't like." Ramsey claims that 37 percent of marital problems stem from tension over finances.

Other evangelical groups, including the Good Sense Ministry at Willow Creek Community Church in Illinois, proffer similar kinds of advice. All offer a form of tough love when it comes to debt: debt, they say, is spiritually debilitating. It is likely that they would prefer to call it sin but have the pastoral sense not to blame people who are in the early stages of recovery. The way out of such bondage, they say, begins with setting up a basic budget. They instruct families to start their budget by allocating 10 percent to the church (pastors, don't reach for the phone yet) and 10 percent to savings. If the remaining 80 percent of income doesn't cover expenses, then something has to give: find another job, trade down in housing or sell off some assets.

These counselors' main message is that borrowing—some say even for a home, car or education—is bad. There is some variation on this point. Good Sense is not allergic to all kinds of debt; it merely discourages unsecured borrowing, in which the purchase can't be easily resold and the debt repaid, as with a car or house. Ramsey's and Crown's repudiation of debt is more sweeping, though a spokesperson at Crown insisted that its stance is not absolute. "Crown has never said that borrowing is prohibited in scripture," a spokesperson wrote me in an e-mail. But the e-mail message continued: "It is not recommended and never gives God glory." Read more

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