If you’ve ever listened to Dave Ramsey, you’ve probably heard of the “emergency” fund. When you start his Financial Peace University program, this is the first thing to be done. His point being that credit cards and payday loan “emergencies” become less so when you actually plan for them.
Ramsey goes so far as to say each family ought to have available funds to cover 3-6 months of expenses. That is often a large pill to swallow. Yet, as many people are struggling to make ends meet, and are looking at losing their jobs, homes, and even health care much would have been easier if all were so prepared.
In response to the 25%+ foreclosure rate during the Great Depression, the federal loan agent Fannie Mae was created in 1938. As homes and property were physical assets, there was some tolerance for it. Though one can look at the current housing market and wonder if Fannie Mae (and its “sibling” Freddie Mac) were a good idea.
In 1950, Diner’s Club International created the credit card. American Express followed a few years later. Bank of America followed them (eventually creating Visa). Then came Master Charge (now MasterCard). People were now able to borrow themselves into oblivion.
Then we add things like personal loans, auto loans, and student loans, it has become a real mess. The way the US tax code is, even companies are encouraged to do massive loans for tax benefits. The sad part is how much inflation all these loans (and the ability to get them) have probably caused.
However, what is interesting is that Generation Z has experienced and witnessed this, and all the companies that make money off of loans may be in real trouble. Gen Z already (barely into the workforce) has the highest rate of savings since those who grew up during the Great Depression.
The reality is that all these loans, and all that is spent, buys nothing in the eternal kingdom, at least not by itself. James’ words are rather harsh, but as we look around us, we can see that perhaps James wasn’t harsh enough.
A certain aerospace company contractually forced its subtiers (and their subtiers) to continue production of a plane that was grounded internationally. The rate of manufacturing was elevated at such a rate that hundreds of planes are now sitting, unsold. All the contractually obligated subtiers are also sitting on what is now likely at least a year’s (and likely 2-3) worth of inventory, with no one to send it to.
The arrogance of large corporations can be seen in James’ words. Also, as we look at all of our political leaders, we can see that arrogance regarding the future is just as much an issue for them as for companies.
Normal folks encouraged to have loans they can’t afford, look at the corporations and politicians who, by and large, escape the consequences. Normal folks are the ones losing their jobs. The politicians are keeping theirs.
What are some lessons that we as Christians and as people of the US can learn from the economy and the COVID situation? How do we apply them to our Christian walk moving forward? How might the lessons how we treat others and even exercise our freedoms and responsibilities?
Lord, you are our hope and our firm foundation. May the Holy Spirit continue to guide us toward a holy view of money that we might be better citizens of the US and also the Kingdom of Heaven. Amen.