Recession and the Jubilee Principle
As you might have notices, the world is facing and is already in a recession. One way this presents itself is right around the corner. When we moved to this area, houses just like the one we are renting were selling for $250,000 or more. Today, six months later, you can find the same houses (the entire development is a great multiplication of the same four house models) for sale at the extremely low price of $150,000!!! That is a drop of $150,000 in six months!
Yet one more sign of a messed up economy, and absolutely a contributing factor, is the price of gas. At the time we moved back to the U.S.A. in 2005, the price for one gallon of gas was about $1.40. The past three years, that gas price has been rising to the skies faster than a space rocket. Six months ago, the price for one gallon was close to $4.00, a couple months later it was close to $5.00. About one month ago, the gas price started to go down. In about one month, the gas price has gone from close to $5.00 per gallon to $1.40 per gallon!!!
The economy is weird. The entire state of Michigan, specifically the city Detroit, is feeling the effects of the recession. The auto industry has its heart there and that industry is hurting severely.
The problem: people cannot buy stuff anymore, businesses cannot buy stuff anymore. Why? Well according to some, because they do not have the CASH, according to others, because they cannot get more CREDIT. The U.S.A. had reached the bottom of the financial bucket. Lenders could not lend anymore and borrowers could not borrow any more.
The solution: Bailout-plan of $700 billion so that we can lend more/borrow more. Let us dig the hole of debt even deeper so that the next time we crash, it will be even harder to get up.
I am not writing to state any reasons to this recession, I am writing to remind ourselves of an ancient tradition and principle.
The good old Bible talks about a year of Jubilee. It talks about forgiving debt. Hm… Forgiving debt? Sounds crazy, who would want to forgive someone debt. I can understand if God wants me to forgive my brother his debt of $5 to me. But to ask that GMAC forgives all their customers their debt of billions of dollars, that is a little bit too much, don’t you think?
But let us look at this. If a lending institution was to forgive its customers all their debt every 50 years, would it really be that bad? Example: If you buy a house for $100,000 with a 30 year mortgage, you end up paying back around $300,000. The lending institution has thus made a lot of profit on your purchase, with credit. They should have the capacity to forgive all debt once every 50 years. And I want to state that it is a good move for future profit.
Imagine that the average American has $10,000 in credit card debt (I have heard less and way more so…) and a house mortgage of $200,000, car loan of $30,000, and maybe student loans. That is a monthly payment of A LOT of money. I have not done any research but let us say that the average American family pays around $2-3,000 per month in credit, of which most is interest. If now their debt would be erased, they would have $2-3000 to SPEND or SAVE every month, right? Have we not now created an awesome Buying Power?
Long post, I know. But think about it. What got me thinking about this was my Father in Law. He has been reading some heavy duty books on Economy etc. He told me that a crisis like this has always happened around every 50 years. I find that interesting.
This principle is absolutely the opposite from the Bailout plan from the Bush administration. Would Obama have dealt with it differently? IS it really the gread of the big people in Washington that caused this, or on Wall Street, or other Executives? No, it is the greed of every person living right next to you. It is the use of credit to get things that you cannot afford. The one in debt is a slave in the hands of the lender… Does that really mean something? Does it mean something to say that the love of money (stuff) is the root to all evil?
Enough for now.
I have three more blogs, more churchie, that are waiting to be written.
Later
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glad your back……are you calling me greedy?? Just kidding. Lov you babe