Sunday, August 30, 2015

Sunday Sermon: Debt

Beyond Belief: Debt, the Religious Angle

Is Debt necessary?

The answer is YES, but it is somewhat of a slippery slope. At a trivial level debt is merely an enabler.  You want to buy a weeks shopping but you don't want to carry cash.   So via your credit card you effectively take out a short term IOU, loan, i.e. go into debt with them, only to pay it off at month end from your existing cash reserves.

In these trivial cases: you have the money, (right now)  to cover an expenditure but it's not convenient to hand over the money for goods.

Just down the road from this is the case where you really don't have the money right now, but instead of saving until you do have the money, you want or desire to take the goods now, & so using a loan, you incur  a short term debt which is then repaid with interest to the financier.

In the middle ground, perhaps you want to finance a car.  The same pattern but the repayment period is typically years and not months.

And at the end of the spectrum might be the debt incurred for a property.  Since this debt might be (say) for 30 years it would be unreasonable to save up first a) because then you'd only own at the end of your working life/life  b) since house prices rise much faster than wages, waiting would normally leave you in  a position where you'd actually never be able to afford anything.

But it is a slippery slope.  In Switzerland, it was typical for couples to take on a house loan that would actually be passed on to your children, in other words, it was a given that the loan debt would never be paid off in your lifetime.  Only stupidly low interest rates, now present in all parts of the Western world have (temporarily) changed this timeframe, to in most cases a lifetime.

So,  initially debt, borrowing money starts off as an enabler but can lead to something more worrying.

What does it say about Religion
If you are a believer in Religion X (say Christianity), then for consistency and to guard against hypocrisy you should understand your Religion's teachings on it and follow them. So please listen to this podcast

Why Listen to Beyond Belief

As a short plug and aside:

- It is free

- Available on demand
- Thought provoking
- An insight into Religions other than your own
- A forum where you can see Religions talking openly and in a non hostile fashion over one another

Religious Harmony

What initially delighted me to Beyond Belief is to discover a programme where people of different faiths would be interviewed together and have these different faiths be at least civil to each other.

That is somewhat remarkable.  And worth a listen purely on those grounds.   It also gets somewhat entertaining when different faiths pronounce their often totally contradictory teachings on a subject area, because, their peremptory viewpoint derived from an infallible holy book, cannot be wrong.

What did it teach me

I evaluated the Religious teachings on debt with varying degrees of hilarity.

Today there are complex financial systems that were never imagined thousands of years ago.  And even people living the most mundane lifestyles in first and developing countries can see clear reasons how debt can be usefully used.

So I judge all the religious doctrines against the theories that I have learnt throughout secular life and specialist financial learning and teaching.  It's that they might have some truth in them, but they are more or less flawed in today's world which differs so much from the pre industrial, pre scientific and pre technology based world in which the religious texts were written, (or some would claim, dictated from a God or messenger of a God).

Debt Categories

+ A bridge to allow you to enjoy products and services now, that might take too long to save up for.  A house is a good example.   Or to cope with an unexpected circumstance, for example a medical bill.

- An enabler to allow you to live a lifestyle of extras  (above subsistence) that you cannot afford but desire

+ An enabler to allow you lead a Subsistence lifestyle in the short term until those debts become large and unserviceable. You have taken on this debt because of an avoidable catastrophe in your family.  Example, natural disaster leaves you without a home or husband.

- An enabler to allow you to lead a Subsistence lifestyle, until your debts become unserviceable.   But you knowingly took on commitments, perhaps extra children, without any idea how you could support them.

In all but the first instance you will leave this world leaving others, e.g. friends, family, society, paying for bad decisions or circumstances.  In the case where you choose to live beyond your means, your selfishness means that you have net gained, and others will have to pay for your profligacy.


Beyond Belief: Debt download (2015)
BBC: The Debt Business (2015)
BBC: A history of Debt (10 episodes 2015)
BBC: Peston and the house of Debt  (2014)
BBC: The meaning of Debt  (2011)