A high savings ratio and worry about tomorrow.
Economic news has become part of daily life since the start of the 2008 global fanacial crisis. Economics is a complex subject and national governments everywhere are trying to kickstart economies, avoid fiscal cliffs and reduce borrowing without causing ressession. There’s a few facts about the recession which are interesting and which Jesus’ teaching goes a long way to getting round, so I’m going to blog about attitudes to money this week.
Fact 1. The savings ratio increases in the recession. In the boom years, people saved only 4% of their disposable income. Since the recession began, the ratio increased to 8% and has hovered between 6-7% since. People are hoarding more for their dosh in case things get tougher.
This increase in the saving ratio creates what economists call the paradox of thrift. When people save more for a rainy day, less money is spent and so this causes a sharper downturn in economic activity. The basic attitude of the heart is a self-centred one; “I need to store up funds just in case” but this makes the situation worse for all.
Jesus turns this attitude inside out. Jesus tells us not to trust money, “Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear.” Matthew 6:25
It’s all very well that Jesus says don’t worry, but there need to be a reason. This is the reason Jesus gives, it is two fold:
1. Money is to be used to eternal purposes. “But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal.” Matthew 6:20
2. The way we use money reveals the attitude of the heart. For where your treasure is, there your heart will be also. Matthew 6:21
Jesus’ teaching is the inverse of the paradox of thrift. Jesus insists that his followers must not put their trust in treasure, because money does not provide ultimate security. When human hearts are collectively focused on God for security, now and in eternity, then our clutch on money is released and any money we have is spent or given away for the good of others.
Here’s the real paradox. The nation focused on God for security has a healthy economy because money is not hoarded but spent or given away. But the nation which focuses on money for security lurches from boom to bust as money sloshes about in “good times” but vanishes under rocks in “bad times.”
Tomorrow I’ll blog on total savings and generosity.