Debt and Sin
This article first appeared in the Minden Times in November 2023.
As we tip into the holly jolly Christmas season, with its pressure to buy gifts, make gifts, plan events, prepare food, embrace the challenge of winter road trips and chaotic airports, let’s take a moment to think about debt. Some while ago someone sent me a review of a book (…And Forgive Them Their Debts: Credit and Redemption) by economist Professor Michael Hudson based on the thought-provoking fact that in many languages, ancient and current, ‘debt’ and ‘sin’ are the same or closely related word.
Wow! That means that Canadians are among the most sinful on the planet! We have the highest household debt level in the G7; on average we owe $1.81 for every $1 of disposable income. Increasingly, we manage that debt by leaving a balance on our credit cards – on average $4000 -- on which we pay an average of 23.75% interest, calculated daily. The worse your credit rating, the more you use your credit cards and the higher interest rate you pay.
From whatever angle you look at that, it looks like sin. Usury is what the bible called it, and in the Old Testament, Jews were not allowed to charge interest to other Jews, although they could to people from other countries. Prof Hudson makes the point that Jesus was crucified not for his religious beliefs, but because of his economic activism. (We do recall him destroying the lenders’ tables in the synagogue.)
Apparently there was a hotly contested practice of new leaders starting their rule by declaring a Debt Jubilee, wiping the financial slate clean for all its citizens. This was considered a smart political move because it meant that men were not swept into bondage and remained available to serve their country. Hudson draws a parallel with debt forgiveness for post world war Germany, which allowed that country to rejuvenate, in contrast with the USA not forgiving mortgage debt in the 2008 economic debacle, so that millions became homeless, where they likely had great difficulty contributing to the economic or social life of the country.
Predictably, debt jubilees were not universally popular: the Pharisees (who I think were the bad guys when Jesus went on his rampage in the synagogue) in particular defended their right to make money by lending money. Hudson says that is the dominant creed of the moment, and it certainly looks that way from where I sit. The corporations whose DNA requires that they optimize returns, regardless of the cost to society, seem to march to a different drummer than us mere mortals. We are expected to shoulder the consequences of our decisions; they’re ‘too big to fail’ and qualify for rescue with public money. They rabidly gobble up their competition and leave us at the mercy of monopolies, which are immune to corrective action. Because if they fail, we will lose access to the service or goods they control, which may well be necessities of life.
Which gets us to the cost of housing, the primary reason why Canada leads the G7 in household debt. Seventy-five percent of household debt is related to housing. The cost of housing has doubled since 2011 for no good reason but that it can: they have it, we need it, they set the price, we pay the price. We’ve drunk the Kool-aid that home ownership is the best, perhaps even the only way, to increase wealth. This is true only if housing continues to increase in value and we have drunk that Kool-aid as well – we are led to believe it is inevitable that our houses will increase in value, and we buy it, even though we also know that real estate is cyclical, that what goes up must come down. Denial is resilient.
So I’ve made Canadian homeowners to be the biggest sinners of all time. Those who squeaked into buying before the door clanged shut (which it still hasn’t, although the threat perseveres) and who are living on their credit cards because they needed to renegotiate the mortgage, and borrowing rates did go up, as was said to be inevitable: sinners, the lot of them! Is it time for a Debt Jubilee? I have trouble with that idea, even though I don’t think that being house-poor makes for good citizens.
What I do want for Christmas is that someone go on a rampage and destroy the lenders’ businesses, drive them out of community space, expose and disgrace them. I think Pharisees are the sinners.
