The Real Deal on Debt

Jul 02 2017

Barry L. Cameron

Noted Christian financial expert, Dave Ramsey said, “Debt is so ingrained into our culture that most Americans can’t even envision a car without a payment, a house without a mortgage, a student without a loan and credit without a card. We’ve been sold debt with such repetition and with such fervor that most folks can’t conceive of what it would be like to have NO payments.” 1

Randy Alcorn said, “We drive our bank-financed cars, running on credit card gas, to open a department-store charge account so we can fill our savings and loan-funded homes with installment-purchased furniture. We’re living a lie and hocking the future to finance it.” 2

DO WE HAVE A PROBLEM WITH DEBT? 

Lee Eisenberg, in his book THE NUMBER (which came out eleven years ago) quoted an article from the NEW YORK TIMES which said, “An American declares bankruptcy every fifteen seconds.” 3 That was TEN YEARS AGO. We can only hope that number has gone down. Common sense would suggest otherwise.

The careless, cavalier attitude many people and organizations, including churches, have toward debt should concern us all. But, in too many cases, it doesn’t. Here’s why it should:

These are the latest statistics (4.7.17) on DEBT in the United States:

  • Today’s federal debt is about $19,846,103,311,307.75 (That’s almost $20 TRILLION!)
  • The amount is the gross outstanding federal debt issued by the United States Department of the Treasury since 1970.
  • But, it DOESN’T INCLUDE state and local debt. (Which is estimated to be another $1.20 TRILLION for state and $1.89 TRILLION for local by the end of the year.) 
  • AND, it DOESN’T INCLUDE so-called “agency debt.” (Which is estimated to be another $8.62 TRILLION by the end of the year.)
  • AND, it DOESN’T INCLUDE the so-called unfunded liabilities of entitlement programs like Social Security and Medicare.
  • Federal debt per person is about $60,822.
  • At the end of FY (fiscal year) 2017 the total government debt in the United States, including federal, state, and local, is expected to be $23.2 TRILLION! 4

WHEN IT COMES TO THE TYPICAL AMERICAN HOUSEHOLD, THINGS AREN’T MUCH DIFFERENT.

Check out these statistics from Q4 2016:5

 

Total owed by average U.S. household carrying this type of debt

Total debt owed by U.S. consumers

  Credit cards

 $16,748

 $779 billion

  Mortgages

 $176,222

 $8.48 trillion

  Auto loans

 $28,948

 $1.16 trillion

  Student loans

 $49,905

 $1.31 trillion

  Any type of debt

 $134,643

 $12.58 trillion

WHAT SHOULD WE DO?

    • We need to do what the Bible says. The Bible doesn’t prohibit debt, but it does discourage it. “The rich rules over the poor, and the borrower is the slave of the lender” (Proverbs 22:7). “Whoever puts up security for a stranger will surely suffer harm, but he who hates striking hands in pledge is secure” (Proverbs 11:15). “Be not one of those who give pledges, who put up security for debts. If you have nothing with which to pay, why should your bed be taken from under you?” (Proverbs 22:26-27)
    • Any debt we incur should be short-term since the longest term of debt in the Bible was 7 years and the future is so uncertain. “At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor. He shall not exact it of his neighbor, his brother, because the Lord’s release has been proclaimed” (Deuteronomy 15:1-2). “You do not know what tomorrow will bring. What is your life? For you are a mist that appears for a little time and then vanishes. Instead you ought to say, ‘If the Lord wills, we will live and do this or that’” (James 4:14-15).
    • If we go into debt for anything, we need to have a plan to pay it off. “The wicked borrows but does not pay back” (Psalm 37:21). “For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish’” (Luke 14:28-30).
    • The goal should be to get completely debt free. “Owe no one anything, except to love each other, for the one who loves another has fulfilled the law” (Romans 13:6).

YOU CAN BE DEBT FREE!

Anyone can get debt free. But it takes time, tenacity, tremendous discipline and sacrifice. Our family has been debt free since November 15, 2001. Our church has been completely debt free since November 9, 2008. 

To paraphrase Dave Ramsey, debt is so ingrained into our culture we can’t even imagine life without it. But the truth is, life gets better once you’re completely debt free.

… and you can take that to the bank!

 

© 2017. Barry L. Cameron. All Rights Reserved.

1 Mary Hunt.  Live your life for half the price. DPL Press. 2005. pg. 169
2 Randy Alcorn. Money, Possessions and Eternity. TYNDALE. 2003. pg. 314
3 Lee Eisenberg. The Number. FREE PRESS. 2006. pgs. 38-46.
4 Source: Statistics taken from: http://www.usgovernmentdebt.us
5 https://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/

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