A Matter of Life and Debt: The Role of Religion

Sure, the US government currently borrows too much—and eventually we will have to bring down our debt-to-GDP ratio or face a serious crisis. Point taken.

But what strikes me as painfully ironic, even tragic, at this moment of continuing economic suffering is that federal government borrowing used to maintain or create jobs and thus revive demand (a big qualifier) should really be viewed as virtuous debt in ethical terms. Whereas the truly odious and corrosive forms of debt, the forms that blight lives and destroy livelihoods, are hardly critiqued at all by the high-minded deficit hawks within the chattering classes, let alone by any prominent American religious leaders.

Here below—in the streamlined form of religious instruction known as the catechism—is an exercise in thinking about debt in religious terms:


Question: When and how, for members of the Abrahamic faiths, does salvation history begin?

Answer: God is moved by the suffering of a people who have been reduced to bondage—that is, sold into debt slavery—and God delivers that people out of indebtedness into a new kind of community based on freedom from debt peonage.

Question: How do we know this?

Answer: The voice to Moses from the burning bush declares God’s identification with those dispossessed by debt. The law later given to Moses at Sinai expressly commands complete debt forgiveness at regular intervals. Even before the Sinai episode, God makes it clear through the giving of manna in the wilderness that hoarding is forbidden: that shared abundance is to be the foundation of just community. All of the Hebrew prophets rail against debt oppression (e.g., Isaiah 3:15 : “What do you mean by crushing my people—by grinding the face of the poor?”). 

The defining event in the ministry of Jesus of Nazareth is his spectacular disruption of the oppressive banking practices taking place in the outer court (sometimes called the Gentile Court) of the Jerusalem temple: an event that ensures Jesus will be bound over for trial and quickly eliminated. Everything that Jesus and Paul say about God speaks to God’s surpassing generosity and thus to the need for God-followers to be similarly generous: to release debtors and forgive debt.

Islam further intensifies the Abrahamic condemnation of moneylending; Muslims and Muslim cultures maintain to this day an alternative system of interest-free banking.

Question: But why this religious obsession with debt? Debt is just a tool for doing business, right? And don’t the economists tell us that credit makes the world go round?

Answer: Because almost without exception debt reduces both the wealth and the freedom or capacity of the debtor. Debt frequently leads to physical and psychological violence against borrowers who cannot pay. Borrowed money may look and feel a lot like real money, but it is simply money that has been rented for a fee. It might buy the borrower a little time, but it almost always costs the borrower more than its use value can justify. The only exceptions to this rule of diminishment: (a) borrowing by shrewd businesses that can make a higher rate of business profit than the rate of interest they must pay on their debt, and (b) microcredit schemes that can sometimes nurture itty-bitty businesses in very poor societies.

Question: Well, that’s all very nice. But take Americans’ credit cards away and watch how the economy collapses completely. Is that what you want?

Answer: All that the credit cards are doing now is concealing the extent of a collapse that has already happened. We need to find our way back, slowly but steadily, to sustainability and just community. We could start by ensuring that the rates and fees small borrowers must pay on current debts are at least no greater than the rates that big borrowers pay. Right now we don’t even do that; it’s quite the reverse: our poorest and most vulnerable pay by far the highest rates, and this indecent bloodsucking—this grinding of the faces of God’s poor people—will continue if the “financial services industry” succeeds in eviscerating the financial consumer protection agency that was just created under the new Dodd-Franks law.

Question: Why do you use quotation marks for “financial services industry”? That is so demeaning!

Answer: Because in religious terms the misnaming a form of oppression contributes to the oppression. And there is no way that our American usurers, especially the providers of payday loans and the predatory credit card issuers, can be said to be providing a “service” to those whom they entrap in an endless debt cycle. The mortgage “servicers” are equally if not more rapacious: they just love to keep delinquent and anxious home borrowers in limbo while they extract rich delinquent fees. They often mislead borrowers about possible remedies, then suddenly seize the property (and collect even more fees) with no warning.

Question: And is there not an even more insidious dimension to the finance sector and its growing role?

Answer: Yes, there is a too-little-noticed cancerous dimension. The burgeoning finance sector (which now reaps more than a fourth of annual US business profits; 25 years ago it took in just a seventh of the total) contributes almost nothing to the real economy—to the production of good and services—and in many ways it has been ravaging the real economy for the past 40 years in the manner of a cancer or tape worm: think of all the leveraged buyouts in which the assets are pillaged and the workers sent home.

The financial sector is also a cancer on our politics, spending vastly more money to buy votes in Congress than any other sector except (wait for it!) the health care industry. The cancer metastasizes because of the outsize profits and pay in the finance sector: 60 percent higher than in other sectors requiring equivalent levels of training and skill. All that talk that you hear from Wall Street and its political and media enablers about how finance promotes efficiency and innovation is so much self-serving eyewash: the historical record shows that the US economy was far more dynamic and innovative before the finance sector went on steroids—back when interest rates were limited by law and bank practices were strictly regulated. 

Question: All right. But aren’t these weighty systemic questions better left to experts and economists? We religious folk have a lot of other issues to worry about—issues that we are more competent to address.

Answer: Actually, just about all of the issues that we religious folk insist we really care about—issues like world poverty and hunger, resource wars and environmental degradation, human trafficking, widening domestic inequality, shrinking access to quality higher education, declining on-time graduation rates for low-income students and students of color, urban neighborhood blight, stress-related health problems, declining family life and domestic violence—are directly related to systemic debt oppression.

If the most urgent moral question of the 20th century was the question of color line, perhaps an equally urgent moral question for the 21st century is the debt line—a line not at all unrelated to ongoing race-based oppression.

We can mumble and fumble our way around the edges of this, or we can be true to the burning core of our spiritual inheritance (cf. Exodus 3 on flammable divine indignation over debt peonage) and say clearly and consistently whose side we are on.

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