1 posts categorized "Religion and Hunger"

Last Saturday I attended a presentation on debt at a church by where I live. A friend of mine is a financial counselor and volunteers to speak at churches, at women's shelters and other venues where people who want professional advice on managing their money can't afford to pay for it.

Debt is a big problem in the United States, and not only at the household level. It's a problem for our government, presently running a record $9 trillion debt. Carrying that much debt makes it hard for government to invest in national assets like infrastructure (remember the bridge that collapsed in Minnesota last year) or our country's most important assets, its people. When individuals carry too much debt, it also makes it difficult to invest in productive assets (e.g. education) that in the long run would increase their economic security and self-sufficiency.

Of course not all debt is bad debt. You can't buy a house without accumulating lots of debt. If you don't have a record of paying down your debts, you have a lot harder time getting credit at reasonable interest rates. To some extent, we all need to carry some amount of debt.

One of the paradoxes about being poor is that you pay more for credit in the form of higher interest rates. When you think about it, if anyone needs credit at low interest it's poor people. Lending to the poor entails more risk to creditors, and this is why the credit industry says they have to charge poor people higher interest. The poor get into trouble paying down debt because that's the nature of being poor, living from paycheck to paycheck. It all seems like a self-fulfilling prophecy if you ask me, but hey I'm just a guy who works at a nonprofit.