Three Mountains (8) - No Long-term Debt

The Kingdom of the world says that debt is efficient. The world economy is based on debt.

The Kingdom of God sees debt as dangerous, because the borrower becomes the slave of the lender.

A key biblical principle is that all loans should be short term. The reason for this principle is that no one except God knows the future. Since we do not know the future, we should not make contracts that bind the future. The future is the Lords. He will not allow us to commit ourselves beyond the immediate future.

God says the maximum time that we can bind ourselves for is seven years. No one should borrow more than they can repay in that time (Deut. 15:1-3; Ps 37:21). Beyond seven years, we do not know what our situation will be. Therefore, we cannot be certain that we will be able to repay the loan. An honest person does not make commitments that we may not be able to keep. We do not know if we will be living or what our situation will be in thirty years’ time, so thirty-year mortgages are dishonest. All loans and deposits should have a term of less than seven years.

Even if principle of a seven-year limit on loans is not accepted, the matching rule will push long-term interest rates up too high for people to risk taking long term loans. The seven-year principle will come about by default.

Most loans will be business loans. Christians should do their best to stay out of debt, so borrowing to buy consumption goods should be avoided. We should only go into debt as a last desperate solution to poverty, because a borrower is a slave of the lender (Prov 22:7). A lender is able to control those who are in debt to them. God wants his people to be free to obey him. If we are in debt, we do not have that freedom.

Borrowing to buy capital goods that are productive is legitimate for Christian businesses. Capital goods will produce a return to the borrower, which will cover the cost of the interest. On the other hand, Christian businesses should only borrow to get started. As God blesses them, they should quickly get debt free, so that they are free to fulfil the purposes of God. Expansion of the business will be done out of retained profits.

Christian business will try to get rid of debt.

Let no debt remain outstanding, except the continuing debt to love one another (Rom 13:8).

If they are obeying God, then Christians should be in a position where they can lend to others.

The LORD will bless all the work of your hands. You will lend too many nations but will borrow from none. The LORD will make you the head, not the tail… you will always be at the top, never at the bottom (Deut 28:12-13).

Long-term indebtedness is a sign that God’s blessing has been lost, through failure to trust him or obey his Word.