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…as we forgive our debtors.

Aug 7th, 2009
by Drew Tatusko.

The biggest problem with the US economic system is that it relies on debt to work. The Federal Reserve is the institution established in 1913 as a regulatory agency to smooth out the banking industry primarily through the control of how much currency is available at any given time. The assets that the Fed holds are essentially loaned out to banks creating one level of debt that all of the banks that in turn lend you money to "buy" a car, house, education, line of credit, etc. They have to then find a way to make money to pay back what they owe on the assets they have. Their debt gets passed off to the consumer in the form of other interest rates. Debt becomes a commodity to buy and sell like anything else.

So what happened when the Fed cut interest rates over and over again? It made more debt possible for consumers to "buy." The Fed passed it's low interest rate down to consumers to falsely stimulate the economy with the promise that people would be able to sustain their debt long enough to pay the interest rates thus expanding markets like housing, which stimulates construction companies and banks to sell more loans. The problem is that all of this was build on literally nothing! There was no real money there, only debt and interest. There would never be enough cash around to secure the massive debts that consumers were taking on. So what does the Fed do? Slows the growth by making cash more scarce forcing consumers to shell out liquid assets in the form of tax dollars and federal budget restructuring.

This is the system we have. A central bank controls the flow of money as a means to control what banks can do and thus what kind of economic growth we can expect. It is cyclical and built not on what people actually earn, but based on how much debt and interest people can pay in order to balance the system and pay all the way up to the top of the food chain.

Debt is a form of economic enslavement. If an economy is built on debt and a promise to pay that debt back at an additional cost, people own very little (this is without even factoring in credit cards) and produce less than they actually owe. The only way for this equation to balance is if some people default on their debt, get kicked out of the system, and open up a debt that can be given to someone else. While bankruptcy helps right the ship for some people who have no choice, it does nothing for the banks since they have lost revenue in the deal. No one wins. But at least you are kicked out of the system for a time.

In many forms of the Lord's Prayer we pray, "Forgive us our debts, as we forgive our debtors." While this makes strong purchases on an understanding of the atonement I frankly don't buy, it works in this context very well. The second part of the phrase asks us to offer forgiveness to those who "owe" us something. It is an expression of charity, of grace as Jesus revealed in the Resurrection. The economic system we currently have where the most valued commodity is debt is a system that must reject charity. It only works if that charity results in someone, somewhere making additional money in order to make up for deficits in profits that charity actually creates. Tax breaks are one means of this. But true charity, giving of one's self and services with no expectation of a return on the investment is simply bad for the economy.

I am puzzled therefore at the rather vociferous social conservative movement that is assuaged by this free market capitalism built on debt, when Christian charity should work in the opposite direction. Because charity is ultimately so disruptive to the system, it captures the radical nature of a statement like "Give to Ceasar what is Caesar's and to God what is God's." This does not simply mean that we need to pay our taxes and go to church where we should tithe. What Christ demands first is love of God and neighbor which means forgiveness and charity to those with whom we associate at any level. The very system of the US economy must run counter to this understanding of the world. Devotion to God is devotion to something very different than system that relies on debt to survive and grow. It relies on a love that forgives debts as an act of devotion not to profit, but to God.

How radical can Christian faith be when not held under the thumb of a system that coerces people not to love, but to self-preservation? How revolutionary is a faith that proactively rejects this system in order to build the Kingdom of God rather than be complicit in building the Kingdom of the Free Market? How much is the church progressively failing in this revolution of faith?

Related posts:

  1. radical economics – a mandate for the new church?
  2. radical church idea or, what i would like to do with my life some day
  3. stop giving money for the afflicted
  4. "going green" is part of the problem
  5. gays in the church: an economic approach

Posted in: Politics, Society, Theology.

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  • While I agree with some of your thoughts, I must strongly disagree with others.

    The Fed was not created to "control the amount of money," but primarily and specifically to debase the currency (the dollar has lost around 96% of its value since the Fed was founded, as opposed to almost no change in the relative value of gold and other commodities before or since, or--barring war or some natural catastrophe--almost no change in the dollar's value before, 1913) in order to widen the gap between rich and poor, and to destroy the middle class (and thus remove any potential overthrow of the system). And, let us not forget, it was established by the Progressives to do that, following that Father of American Mercantilism, the evil and self-serving Alexander Hamilton.

    I have some trouble with your writing because you use outdated and misleading labels (like "conservative" and "liberal") that are, today, just two sides of the same fascist coin. They don't have any real meaning anymore. Further, there is no such thing as a "free market" under a central bank, or a government that grants "legal" monopolies or oligopolies to politically-favored or -expedient firms. (Do you really think, for example, that Exxon-Mobil wants EPA regulations loosened so that it's less costly for new competitors to enter the market? Hardly; staus quo is fine with them, and they'll keep their record profits thank-you-very-much)

    Abolish the Fed, and you abolish the debt-based, inflationary economy. Banks will only loan to those who produce (and therefore can repay) and depositors will only patronize banks which can guarantee the return of their money (100% reserves). Remove moral hazard and government subsidies (eg, FDIC), as well as other government-granted preferences to business (aka, the volumes and volumes of competition-damping "regulations," nearly all of which only serve to lower quality and competition, and thus increase price), and sooner or later, you would see what a real free-market economy (something we've never had) can do for the average person.

    As for rendering to caesar and to God: when charity becomes coerced, it's no longer charity, is it? And that applies both to your robin hood monks (theft), and to redistributionist welfare (theft by government--or do I repeat myself?). But for all of the gnashing of teeth that people love to affect over "greedy Americans," the US was still the most charitible country in the world, last I checked. Because we don't give more is no reason to belittle the amount we do give, or to ignore it.

    Should we give more? Absolutely, those of us who can. But there are two codicils that I would attach to that rule: (1) my responsibility is first to my own family, and only then to the local community and the world at large; and (2) were we to attempt to compel people to give it would no longer be charity, and certainly not "hilarious giving."

    I actually think that pastors should be focusing more on this area of their congregations' walks, tho' not in the usual "stewardship=give me more money" fundamental/evangelical/charismatic formulation. More churches should emphasize the slavery of indebtedness and the "God v. Mammon" choice we must face when considering going into debt, as well as really bringing home the message that the Western culture of rampant, orgiastic consumerism is totally incompatible with a principled Christian worldview. The idea, more or less, that the Joneses may have a lot of really wicked cool stuff, but how faithful are they? how generous? how caring?

    Sorry for the long comment.
  • i think we are actually in basic agreement except for semantics. i said that the fed controls the flow of money, not the relative amount. they do this by many means to dictate the influence of the resource itself as a means of trade. that if the dollar loses value more money is fed into the system or interest rates are cut to stimulate borrowing, etc. the point is that the fed controls the relative scarcity or abundance of the resource we use to exchange for goods and services. i totally agree with your other points.

    i continue to use the words conservative and liberal primarily in an effort to deconstruct them and then re-use them for what they should mean. that there is a conservative movement that focuses to strongly on symptoms of this economic structure without getting at the root of it is the question here. liberal=flexibility to adapt strictures and thus take risks; conservative=to conserve what we have and reinvest that in more predictable ventures. both dispositions have their proper place and time for economic and social development. i am a theological liberal by this definition, but a fiscal conservative where i would rather see local economies lay the beat down on federal currency systems in order to compete with big corp. ironically, it may be possible for a public health option to free people up for entrepreneurial ventures since their health is not linked to corporate structures to make it affordable... rolling it all around right now...

    what would be revolutionary is for churches to reject tithing in the form of dollars, but use a barter system to enmesh themselves in the community as a hub of social and economic trade where no government dollars are exchanged. the problem: property and insurance. not sure how to get around that bit which is the hard part since it sucks the life out of so many religious communities which ultimately pay way more to caesar to function...
  • Excellent post. I think you've cut to the heart of the matter here - our economic system at its root is based on principles that violate the very core of Jesus' teachings. We can't escape it by simply "not being greedy," we are enmeshed in a fatally-flawed structure that is premised on slavery, not liberty. No amount of "free market" rhetoric can overcome that fact.

    Thank you.
  • true charis has to be completely revolutionary in a system like this. i need to think about what that looks like short of a monastic order that behaves like robin hood.
  • dwcongdon
    Superb. Thanks.
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