An Interest in Interest

Most people seem to be unaware of the fact that lending money with interest is forbidden in the Old Testament.  Most of the prohibitions are technically aimed at the lender, who it is implied, should lend without interest.  “If you lend money to any of my people with you who is poor, you shall not be like a moneylender to him, and you shall not exact interest from him." (Exodus 22:25)  “You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest." (Deut 23-19)  Most Christians view many Old Testament rules as replaced by the New Covenant, which supersedes the Law.  But many of those Laws were put into place for external reasons, and many of those reasons are still valid today.  God has recently been showing me how ignoring this particular principle at a massive level, has led to many of the issues that we find in American society.

I am not trying to say that lending or borrowing money for interest is still inherently morally wrong.  I am just pointing out that it may still be a bad idea, with consequences that God was trying to protect us from.  Many of those consequences of ignoring that idea only apply to the larger picture, which is why they are more difficult to directly connect to monetary lending.  Others are more personal, and directly affect those involved in the transaction.  I have long been aware that the prevalence of huge mortgages enslaves most homeowners to their jobs.  That is why I bought a much smaller house, with money I had available at the time.  I realize that most people can't do that in the current economic climate, but that is a result of that principle being ignored for so long in the past.  Widespread availability of high value mortgages has artificially increased the price of property across the country.  So now the regular price of an average home is far out of reach of the normal consumer.  Might this be what God was warning us against?

But the issue is larger than that.  Our entire economy is based on credit.  Credit is foundational to most modern business practices, and is the underlying force that drives the stock market.  The same principle that drove up home prices to artificial levels is one of the factors raising the cost of healthcare, and as a result, raising health insurance costs.  There are many economists who believe that a reasonable level of national debt is health for a country.  But this seems to be at odds with the ideals of a free society.  We need a government controlled by the people, and not by those it owes money to.  Modern credit scores are based on financing costs being paid, and therefore reward those who are borrowing money, penalizing those who settle their debt promptly or even immediately.

So what is the best response to this problem that we can make as individuals?  It may be impossible for many people to avoid having a mortgage, but is your house bigger than you actually NEED, regardless of what you can actually afford?  Beyond that, I would avoid getting into debt at all.  What about the flip side, with money we do have?  That is the aspect that is directly addressed in the Bible.  I don't necessarily think it is wrong to store money in the bank, and was raised with a high value on saving money.  And accruing interest in savings accounts seems like a null issue at the moment.  But should we invest in stocks and bonds?  I don't think that is inherently wrong, but there may be a better way to use your resources, which honor this Biblical principle.

If we instead invest in income generating assets that can help other people, we retain the aspect of our resources working for us, while providing a service to others.  In my own case, that may end up looking like purchasing and rebuilding homes to sell or rent to others.  Then my resources are invested in hard assets, which still produce increase, but not based on the extending of credit, or profiting from the existing financial system.  It may look like something else if God shows me a better way, and it will certainly look like something else in other people's lives.  And having our wealth in less liquid forms increases our awareness of our dependence on God's provision.  We are no longer under the mistaken illusion that we can take care of ourselves based on the balance in our bank account.