From: mangoe@cs.umd.edu (Charley Wingate)
Newsgroups: soc.religion.christian
Subject: Re: Christianity and economics
Date: 13 Oct 92 05:08:32 GMT

I have been following the economics discussion and how it has inevitably
turned towards a "traditional" theology of thrift, and Larry Burkett in
particular.  Right now we're passing through the obligatory "take out no
loans" phase of the discussion, with REXLEX carrying the banner in this
partcular instance:


>Moody Bible Institute has *ALWAYS* had the policy that the money is in the
>bank *BEFORE* one buys the land, before one builds the building.  They now
>own maybe 12 square blocks in down town Chicago!  My church is talking of a
>building program.  We simply don't have the money to build unless we
>mortgage.  We have been out of debt [...]  for more than 3-4yrs now.  We
>were able to hire a full time secretary and a full time youth pastor, plus
>send him to college by not having this mortgage.  I am vehimately against
>remortgaging for many reasons.

My church consecrated the addition to the church one year ago this month.
In our case, there was really very little choice in the matter; at least
once a year for the past several years we had a service at which there were
people literally standing OUTSIDE the church because there was simply no
more room to put people.  EVERY Sunday the church was packed, and every
indication was that the crowding was going to get worse.  And we simply
didn't have the money lying around to spend on this, nor could we wait ten
or fifteen or twenty years to accumulate it.  So we now have a wonderful
church with sufficient (for now) space, and a mortgage.

I can understand some of REXLEX's feelings in the immediate case.  Being
able to use the money for other purposes is a reason not to build and not to
get into debt.  Issues such as these require attention.

The more economic/theological reasons given, though, deserve more critical
treatment.  In particular, Burkett's admonitions about "hard times coming".
The economics of prosperity are still obscure; if they were not, we wouldn't
be in the mess we're in.  The economics of depression and contraction,
unfortunately, are very well understood.  After a financial crisis,
people contract their spending, and those put in hardship burn up their
savings.  The resulting decreases wipe out more business, putting more
people in distress and fear.

To a very great extent the admonitions of people such as Burkett (if he be
portrayed accurately) play into this pattern.  Thrift is obviously a good
idea, right?  And I would agree that it IS a good idea, but as an
all-consuming economic principle it is unsound.  Let us take this further
and insist that the government begin balancing the budget and even run a
surplus in order to reduce the deficit.  Government spending goes way down,
T-bills are called in, the money supply contracts, REXLEX gets laid off and
burns up his savings....

I admire REXLEX's spending acumen, but again, I don't see thrift as a
principle above all others.  I our own case, the drive to have a family, to
get some equity, and to have a place where we could raise children according
to our own judgement led to a fairly stiff mortgage; pure thrift would
perhaps have put us in a room in my parent's house, but it was plain that
this was a bad idea for many other reasons.

The most insidious aspect of REXLEX's posting, however, is his comparison of
his own performance with that of other people he knows.  It's not that a lot
of people are rather spendthrift.  It's that the implicit choice he gives is
false.  I suggest a reading of _Journey_ by Robert and Suzanne Massie if one
would like to understand, for instance, how chronic illness can make
REXLEX's brand of thrift impossible.  Wealth requires good fortune;
moreover, in a depression, it seems to me that the benefactors of good
fortune have an obligation to devote their resources to getting the less
fortunate back on their feet.

The one line I object to completely is this:

>the point is that if Xians are faithful stewards, God will supply.

The reality is that what God supplies very often is not financial security.


-- 
C. Wingate        + "The peace of God, it is no peace,
                  +    but strife closed in the sod.
mangoe@cs.umd.edu +  Yet, brothers, pray for but one thing:
tove!mangoe       +    the marv'lous peace of God."

[I'm not sure that I want this group to turn into a economics
discussion group.  I'd encourage people to keep the discussion focused
on the specifically Christian aspect of things.  I don't get the
impression that Burkett is making his case based primarily upon
economic models.

If you want to continue this discussion, I would ask you to try and be
careful to separate static and dynamic effects.  Some models suggest
that a high savings rate promotes growth in the long run.  This does
not necessarily contradict the observation that a change in consumer
confidence can create or prolong a recession, because that is a
dynamic effect, not a static one.  That is, a sudden increase in
savings rate could cause trouble even if in the long term a higher
savings rate would be good.  It's been 20 years since I've looked at
macroeconomics, but at the time I showed (in a paper in American
Economics Review 63(5)) that something similar was going on with the
suspected tradeoff between unemployment and inflation: there are great
differences between permanent adjustments and unexpected changes.

--clh]