The Immorality of Debt

A wise man once said: "Debt is the most aggressively marketed commodity in our nation today." (Dave Ramsey, 2008) Debt has a crucial function in any free economy. When a person wishes to capitalize on their future income in order to purchase something right away, they need to borrow money. Borrowed money banks on future productivity. Therefore, debt is extremely useful for very large purchases (homes), as well as purchases that increase a person's future earnings (business start-up loan, education, etc).

Debt is a powerful tool that comes at a tremendous cost. Families commit to 30 years of payments to cover their home, businesses often fail or operate under perpetual debt, doctors or lawyers spend years paying back their education loans. These costs are all accepted for two reasons: The results would be impossible to achieve otherwise, and the results are beneficial enough that the costs are deemed worthwhile.

Most importantly, the above debts are undertaken with the understanding that they will be paid off at some future point. If a family undertakes a 30 year mortgage and makes the payments, then after 30 years they own a major asset and no longer owe the debt. When a doctor signs for $200,000 of student loans, he knows that he is going to be able to earn a wage commensurate with his debt; he will gain the ability to pay down the very debt is taking.

Three major types of debt face our nation today: Government debt, business debt, and private debt. While government and business debts are troublesome, they deserve closer inspection and will be discussed later. Perhaps most troubling, partly because it enables government debt, is the private debts, or "consumer debts". By definition, consumer debt means that an individual decided to purchase a "consumable" that they couldn't pay cash for.

Why is this bad? Well, for starters, if a person's income is unlikely to change, then there's a reason they can't afford the consumable. Unless they change their income or their spending, they are now living outside their means. By definition, any entity that lives outside its means is pursuing financial self-destruction. Eventually the debts are called in, bankruptcy is declared, and the person is wiped out. On an individual and family level, this is extremely damaging to society. The people in involved are distraught. The people that are responsible end up paying higher costs for the same goods as companies seek to recoup their losses. Everybody loses.

The danger of individual consumer debt is highlighted when you look at how it affects a person's outlook on the world around them. "The guilty flee where no man pursueth." It is human nature to imprint our own personality on those around us. This creates a danger where an in debt person starts to think that living in debt is normal. He looks around and talks to his neighbors and sees that they are in debt as well. Then he hears that the government is in debt. His response: "Oh, well, I guess debt must be good and normal, since it seems to be universal."

THIS IS WRONG!

Those that do not work hard enough to pay for the luxuries they want must discipline themselves to say no to that luxury. "Thou shalt not be idle; for he that is idle shall not eat the bread nor wear the garments of the laborer." (D&C 42:42) This life is a life of work. This life is a life of sacrifice. "By the sweat of thy face shalt thou eat bread" (Genesis 3:19). Work and sacrifice are treated as unnecessary evils in our society today. Politicians scoff at the warnings of impending trouble. Voters ask for more from the public trough. Money (and the labor it represents) that is forcibly taken from those who sweat and is given to the idle.

God has given us his wisdom concerning living outside of our means. It is up to us whether we accept or reject that wisdom. For myself, I believe that consumer debt is immoral. My wife and I are working to rid ourselves of the weight of our debt. I encourage you to do the same. God must reward each of us with the consequences of our choices. "Now the work of justice could not be destroyed; if so, God would cease to be God."

Pray for our country. We need it.