By now, everyone in Canada knows we are in recession. If you believe some economists, it seems likely that the Canadian dollar will hit unprecedented lows, and it definitely looks like we are facing a severe headwind. In order to help stimulate the economy, the Bank of Canada has been lowering its interest rates in an attempt to encourage borrowing, thus pushing the Canadian dollar even further down. As has now been often stated, there are definite winners and losers in this scenario. Two of the important losers are the consumer, and those individuals who are in the process of saving money.Since I am not an economist, but a Bible teacher, you might wonder why this is the topic of my blog. But the Bible has a great deal to say about money, prosperity and the rise and fall of nations. And we do well to pay attention.
One of the drags on the Canadian economy is massive amount of household debt felt across our country. Statistics Canada reports that the average Canadian household has roughly $1.64 of debt for every dollar of disposable income. This means that Canadian household debt is now at record levels. There are several factors that contribute to this number. Student debt, the purchase of a home, business debt, but also consumer credit card debt. Each of these push the percentage of debt over income to new record levels. If interest rates were to rise, the impact on many Canadians would be immediately felt, setting off a national crisis. Hence, in difficult economic times, indebtedness becomes a major factor in the nations recovery.
As Christians, we are left to ponder what God is saying to us. Proverbs 22:7 says, “The rich rules over the poor, and the borrower is the slave of the lender.” Over and over again, the Bible warns against indebtedness. Psalm 37:21 says, “The wicked borrows but does not pay back, but the righteous is generous and gives.” This contrast here between wicked and the righteous is the contrast of the one who borrows beyond his ability and the one who gives generously. And yet, we find that Canadians are unable to give, because the majority of their disposable income is now going to pay off debt, rather than love their neighbor as themselves.
Consider the reality of credit card debt. 46% of Canadians are unable to pay off their credit card at the end of the month. 32% of Canadians don’t keep track of the charges on their card until they receive their bill. And over one quarter of us (26%) use all our resources to make payments, and then even add charges on top of that. Given that standard rates on credit cards are now running around 20%, it seems to me that Credit Card companies are now in danger of running loan sharks out of business. To put the matter practically, Canadians who do not pay off their cards at the end of each month are paying more than double for the cost of the items they purchase. Ask yourself the question, “Would you be willing to pay $1,000 for an item which is also available for $400?
But here is the reality. The bible tells us that indebtedness is like an indentured slave. We end up working, not for ourselves, but for the lender. The reason we don’t give, and can’t give, the reason why we never seem to get ahead is because we have willingly sold ourselves into slavery.
What’s the solution? I think the solution is less of an economic problem, but a spiritual one. Stay tuned for next week.