Economics according to Jesus #3 – debt cancellation

Debt and Jubilee

Yesterday I blogged on the total UK savings pot.  But where there are savers there must also be borrowers and debt is an issue which needs to be addressed.

UK private borrowing (mortages, car loans, credit cards etc) stands at £2.5 trillion. Companies owe about the same again. The government has debts of around £1.8 trillion and our banks owe £5 trillion to other banks. In total, the UK owes almost £12 trillion or almost 500% of the UK GDP (GDP = £2.5 trillion).  That’s like a mortgage of 5 times salary.

The numbers are staggering and almost unimaginable. Long term debt is a huge problem. Debt is so serious in God’s eyes and damaging to society that the bible teaches the people of Israel to forgive all debts every 7 years (in the year of Jubilee – Leviticus 25).  Debt is bad, because it hurts people, makes life hard for those struggling to pay it off and the money being spent on servicing debt cannot be used on more useful things, like boosting economic activity.  That money tends to end up the vaults of savers, locked away for a rainy day.

Jesus teaches that debt is like sin, it needs to be forgiven because whilst some debt can be paid off, some is upayable, just as sin can’t be paid off; “forgive us our debts as we forgive our debtors” Matthew 6:12. The debts in the Lord’s Prayer can be viewed as both moral and material. When debt is unpayable, the people of God are to forgive one another, wipe the slate clean, offer a fresh start, repair the relationship.

The current UK economy has gone way beyond the practical application of the bible’s teaching.  We can’t just forgive all debts as lenders and borrowers don’t know one another.  In the Old Testament days, there were real relationships between lenders and borrowers but today, banks now act as a middlemen thus breaking the relationship between lender and borrower.  Perhaps I could give up some of my savings to help someone out of debt, but I don’t really want to wipe a stranger’s debt clean.

However, there are still valuable principles which can be applied.

The Occupy Movement has cottoned onto the principle of jubilee and has started a rolling jubilee.  Individuals can buy bad debt from banks for a massive mark down, as debt collection companies do.  The individual debt purchaser can then cancel the debt for the other person, establishing a relationship with them.  As Charles Eisenstein writes in the Guardian “The Rolling Jubilee is a genius move for several reasons.” Amounsgt these reasons is the fact that little people can band together against corporate greed amoungst a list of other good reasons.  What Eisenstein does not write is that it is a genius scheme because it demonstrates the gospel of Jesus Christ in a very practical way: Jesus came to cancel the debts which I owe God (Colossians 2:14) by being nailed to a tree (taking our debt on himself) to restore my broken relationship with God.

If everyone with savings used some of those savings to buy bad debt from the banks and then cancel them it would sort out much of the economic burden of debt.  This scheme might also point folk to Christ and the wisdom of God.  And in the gospel, there is a motivation to give up savings which is far greater than the way it was expressed by Eisenstein, “We just want to help people in this unfair system.” The chance to demonstrate the love of God and therefore glorify and honour Christ, for me, is the most powerful motivation of all.