Why am I writing this post? Well, I read Want to Talk About Usury? (insanitybytes2.wordpress.com), and I decided I did.
When some people think about banks and other lenders, I would imagine the picture above comes to mind. I think that is true of insanitybytes22 and the lady whose post (“Nobody Cares About My Political Opinions, part 1”) caused insanitybytes22 to write her own. Do I disagree with insanitybytes22 and her inspiration, jilldomschot? Because the subject is complex, I don’t adamantly disagree, but, yes, I do disagree. Instead of clarifying a difficult matter, I think they are adding confusion.
What is the subject of the disagreement? Remember those student loans President Joe Biden wants to cancel. Well, insanitybytes22 and jilldomschot want to leave lenders holding the bag, not the taxpayers. I don’t think what Biden wants to do is constitutional, and I don’t think insanitybytes22‘s and jilldomschot‘s solution is constitutional either. Like it or not, we don’t want our government just arbitrarily canceling anyone’s debts.
Are the people who conduct business in this country today honorable? Do we have the same concern about the welfare of others that Americans once had? That is something to think about, is it not? Consider an old movie, “It’s a Wonderful Life” (see https://en.wikipedia.org/wiki/It%27s_a_Wonderful_Life and https://www.imdb.com/title/tt0038650/). Note that this old but still popular movie makes an important point about private enterprise. We can be a selfish skinflints, or we can conduct business with honor and concern for the welfare of others.
Does the Bible say usury is wrong? Yes. Does the Bible prohibit charging a reasonable interest rate, one a client can afford to pay back? The Bible does not specifically address that subject. It gets complicated because the Jews were prohibited from loaning money to each other, but they could loan money to foreigners. Why the difference? Well, maybe God does not want us to be either borrowers or lenders, but here is an alternative explanation.
In the Old Testament, the Israelites were forbidden from charging “usury,” or interest, on loans to fellow Jews (Deuteronomy 23:19), but they were permitted to charge interest on loans to foreigners (Deuteronomy 23:20). A mention of this usury law in Leviticus 25:35-38 makes it apparent that it applied to loans made to fellow Israelites who were in poverty. Having to pay back the loan with “usury,” or interest, would only put them further into debt and was not beneficial to the economy. Loans to foreigners, however, were considered international business and approved. This law served as a reminder to the Jews that helping those in need is something that should be done without requiring anything in return.https://www.christianity.com/wiki/christian-terms/what-is-usury-what-does-the-bible-say.html
To gain some context, read Nehemiah 5. Here Nehemiah shames the nobles and the leading people for their greed. Why? Nehemiah was trying to build a wall around Jerusalem in the middle of a famine, and the nobles and leading people were using the situation to enslave their debtors. That is, instead of helping needy Jews who could not pay back loans, the nobles and the leading people required the freedom of these Jews and their families as collateral. It seems loans to foreigners did not ordinarily require such collateral.
Were the people who took out student loans charged an unreasonable rate of interest? Consider What Happens If You Don’t Pay Student Loans? (forbes.com). It is not wise to refuse to pay off a student loan, but few argue that student loans come with absurdly high interest. The important thing is getting a degree that is worth the money spent getting it.
We also don’t throw people into debtor prisons anymore, and we certainly don’t enslave people when they cannot pay off their loans. Still, the Bible is not entirely clear about charging interest. So, why would it be morally justifiable to charge interest? Here is the problem. Any financial scheme to help needy people must generate a profit, or that scheme eventually runs out of steam. Otherwise, we call it charity.
Consider how mortgages work. Unless borrowers pay lenders for the use of their money, lenders cannot routinely loan people money to buy houses. In time, lenders run out of money. That is because not everyone will pay off their mortgage. Moreover, it takes time and effort to find qualified buyers who can pay off a mortgage. So, lenders deserve to be paid for the use of their money.
Consider how Muslims handle the issue of usury.
Islamic personal loan or Islamic finance is a loan based on the Sharia law, the Islamic religious law, as stated in the Quran, Hadith, and Sunnah. The personal loans are preferred means of short-term credit in countries where Islamic banking applies. But the whole process is different than conventional loans.
Unlike conventional loans where the money is a commodity in Islamic financing, there is no money to be borrowed. Instead, the bank “purchases” the item for the borrower, i.e., client, and sells it at a higher price.https://www.blogtrepreneur.com/what-is-islamic-personal-loan-and-how-does-it-work/
Essentially, Muslim “lenders” charge interest when the client agrees to pay the higher price to the lender. Thus, we have a distinction without any real difference.
So, what is real issue? If nobody preparing to throw student loan borrowers into slave labor camps if they don’t pay up, why is Biden cancelling their loans? The answer, of course, is he is the using taxpayer’s money to buy votes.
Why are we allowing this sort of nonsense? When we know we cannot trust politicians with our money, why have we let our leaders drag us into the student loan business? Is that even constitutional? No. Our government has no business either loaning money to students or guaranteeing their loans. Why would we want our government to encourage young people to borrow money?
- What is usury in the Bible? (gotquestions.org)
- Bible Dictionaries – King James Dictionary – Usury (biblestudytools.com)
- WHAT IS USURY? (https://www.bibleresearch.org/–/usury-law)
- Are Student Loans Worth It? (insights.som.yale.edu)
- People in This Profession Have the Highest Student Loan Debt (marketrealist.com)
- Canceling Student Debt Isn’t Free. Here’s Who Pays For It (forbes.com)