How great of a sin is debt?

[Guest MormonGator]

4 hours ago, NightSG said:

"Lord, please let me prove that wealth won't make me a bad person." - Lots of people, myself included.

"Lord, make me chaste and virtuous. But not yet"-St. Augustine 

[yjacket]

5 hours ago, Vort said:

The modern usage of "usury" is excessive interest. As used in the scriptures, the word simply means charging interest. The people of God were not allowed to charge interest on money loaned to Israelites, though they were allowed to charge interest on money loaned to Gentiles.

Much of the modern religious beliefs on usury come from Thomas Aquinas

http://oll.libertyfund.org/pages/aquinas-on-usury

Now in the history of philosophy, Thomas was certainly on the forward liberal edge (using liberal in the classical sense) and his thoughts opened up a lot of freedom-but on usury he simply got it wrong.  Debt and interest are critical components of society-even in simple societies the ability to lend money at interest is critical.  Debt is not more inherently a sin than drinking alcohol is inherently a sin. As LDS, we currently consider drinking alcohol against God's commandments and thus a sin-but it is not an inherent sin.

Debt can be extremely useful-the good kind of debt is debt that is used to produce something. For example debt to start a business, debt to build a factory, etc. Bad debt is debt that only consumes.

However, while debt in and of itself is neither moral nor immoral, how we respond to it can be a sin.  For example, if I loan Mary 1k at 5% interest for 10 years, there is an implicit understanding that not only does the 5% ir encompass the individual's time preference (i.e. lower interest rates are indicative of a short term time horizon) it also encompasses to some extent the likelihood of default. If I know Mary to be a pretty good person, I'm going to give her a better deal than the Shady Joe b/c I have more confidence she will pay me back.  Now, if Mary does default, my reaction to her default could be a sin-if I'm angry, upset, etc. that could be a sin.

The other huge fallacy is that usury is charging "outrageous" interest.  There is no such thing as an "outrageous" interest; it is all supply and demand. If it actually is "outrageous" than no one will get that loan, the person loaning money won't lend it and no transaction occurs.  If the person lending wants to make some money through lending then he will lower his rate to attract a buyer. Getting upset at someone for charging more for generators during a winter storm or for charging higher rates is a logical fallacy-you'd be better off getting upset at the weather. When it comes to the buying and selling of any good (even money) the price on the market reins supreme-there is no such thing as a "broken market" where government must fix or where it is a sin to conduct a transaction due to the transaction itself.

Now while I have said debt is not evil-the current monetary system we are under is absolutely evil. Debt comes from savings, i.e. I had to save 1k before I could loan it to Mary. Unfortunately out monetary system does not work like that and it is 100% an evil, immoral system and is probably one of the greatest evils in the world today. Our monetary system works like this. I make a claim I have 1k, where did I get it I just put the number 1k on a piece of paper and then I give it to Mary and tell Mary I need 2k back in the same paper. How does Mary get another 1k well she has to get it from someone else who I wrote 1k on a piece of paper and gave it to them. Our entire monetary system is built on fraud and theft-it is 100% a debt based system wherein if all the debt was actually paid back all the money would cease to exist (except for a very small fraction).

The reason why the debt is never paid back is because it can't be, our monetary system must continually generate more debt-if it doesn't it would collapse.

Fractional reserve banking/lending is evil and is a sin, but it is so insidious that very few people see it for what it is-plain theft and fraud.

[Backroads]

My warning is avoiding debt to the point of poverty. I've seen the results of those who pick prideful loan avoidance over taking care of their families.

[Guest LiterateParakeet]

1 hour ago, Backroads said:

My warning is avoiding debt to the point of poverty. I've seen the results of those who pick prideful loan avoidance over taking care of their families.

Could you share an example? I'm not clear on what you mean.

[Backroads]

4 hours ago, LiterateParakeet said:

Could you share an example? I'm not clear on what you mean.

I know people who have spent over 10 years working for low pay to slowly take classes instead of getting student loans. Meanwhile, their kids don't get medical attention or proper food or living conditions because of the lack of income. All so they can say they avoided debt.

[Guest]

Backroads, I may or may not agree with you depending on the details.  I've probably spent more time being poor and poorer than anyone on this board (that I'm aware of).  But I was willing to put that time in to make a brighter future.  I would applaud others for doing so.

While I also understand the responsibility for our children, we all need to be allowed to make those judgments for ourselves.  Only in the most extreme cases would I judge someone else and say they've gone too far--which is what you appear to be saying.  But if it really is that extreme in the cases you're referring to, I might be inclined to agree with you.

 

Edited February 19, 2016 by Guest

[Guest LiterateParakeet]

1 hour ago, Carborendum said:

Backroads, I may or may not agree with you depending on the details.  I've probably spent more time being poor and poorer than anyone on this board (that I'm aware of).  But I was willing to put that time in to make a brighter future.  I would applaud others for doing so.

While I also understand the responsibility for our children, we all need to be allowed to make those judgments for ourselves.  Only in the most extreme cases would I judge someone else and say they've gone too far--which is what you appear to be saying.  But if it really is that extreme in the cases you're referring to, I might be inclined to agree with you.

That is my feeling as well.  Perhaps depending on the details I would agree.  At the same time, I admit I'm not a fan of loans for college.  I remember years ago (after my mission) getting a job working as a Correctional Officer for $8 an hour.  It was twice what my little grocery store job paid, so I was happy about that....but in my training class there were several individuals who had college degrees, but couldn't find a better job for whatever reason.  A degree is not a guarantee of a job...or ability to repay those loans (some of which are massive debts).

And you might even be arrested . . . https://www.washingtonpost.com/news/grade-point/wp/2016/02/16/u-s-marshals-arrested-this-man-over-a-three-decade-old-student-loan/?tid=ss_fb

[unixknight]

15 hours ago, NightSG said:

Pretty much every time I search Craigslist for $250-1000, manual transmission and clean title, there's at least one running fine but with a burned out clutch.  Just don't have a way to drag them 60-120 miles home to fix them up.  I've even stopped off to look at a few, and if I'd had a tow bar and a vehicle capable of the pull I'd have taken a couple of those home with me.

88 Civic DX, $500, cranks but won't start, needs head gasket. (Could be a cracked head and/or block if they ran it hard to that point. Pass unless I could at least pull the head for a look before buying. If it really is just the head gasket, about $200-250 to fix, and most other engine problems would be spotted and fixable during the process.)

Brother, I get the point you're trying to make, but here's why I disagree (at the risk of sidetracking the thread.)  Using this one example, when you quote a number like $200 - $250 to fix a head gasket I have to assume you mean that's the cost of doing it in the driveway.  Before I say more, full disclosure:  In my previous career I was an ASE Certified Master Auto Technician.  I've made that repair many times and I can tell you the cost is far beyond $250 to do it in a shop.  Besides which, we're still assuming the seller is correct in their diagnosis.  It may be a head gasket, it may be a cracked cylinder head.  If the car won't even start I doubt it's just a head gasket.  I've driven cars with head gaskets blown between cylinders.   They rattle like crazy, but you can limp them to a shop.  If that car won't start at all then there's something more going on. 

Add to that the age of the car.  When you pull those exhaust manifold nuts you think you'll be able to avoid breaking some of the studs?  Have fun extracting those from the head.  We're also talking about new gaskets for the intake and exhaust manifolds themselves, a new valve cover gasket, and since that's an 88 Civic you'd be a fool not to go ahead and put a new timing belt and maybe water pump on it.  How much are we up to in parts now?  Mind you this car hasn't been safety inspected yet.  Does it need brakes?  Does the exhaust leak?  How's the transmission?  I would find it IMMENSELY naive to think anyone's gonna be driving that car for less than $1,500.  Now we're at least $1,500 in the hole for a car that's pushing 30 years old, and that's assuming it doesn't need any other major repairs.

Mind you, that's a conversation that a couple of guys who know cars can have.  With the right knowledge any major problem can be made relatively simple.  My point from earlier is reinforced... not everybody has that knowledge, or if they did, new cars would be a lot cheaper because buyers would have more realistic options.

[omegaseamaster75]

I have been the owner of several 1k or less cars. This was all when I was a kid/student/newly married. While there is nothing wrong with this (I did it for many years) I could not imagine doing it now. I need a reliable vehicle for my wife and kids AKA newer. I will not have them stranded on the side of the road in a 1k beater. Ben Franklin I believe coined the phrase "time is money" and while I understand the value of working on your own car I think that as a professional adult your time could be better spent elsewhere. Lastly as a business professional I couldn't imagine pulling up to a client's place of business or taking a client out to lunch in a 1k car. 

 

[Guest]

omega makes a good point. It's far different for a man to be dealing with a car broken down by the side of the road, than it would be for a woman with kids in the car (or not). 

[NightSG]

1 hour ago, unixknight said:

Besides which, we're still assuming the seller is correct in their diagnosis.  It may be a head gasket, it may be a cracked cylinder head.  If the car won't even start I doubt it's just a head gasket.  I've driven cars with head gaskets blown between cylinders.   They rattle like crazy, but you can limp them to a shop.  If that car won't start at all then there's something more going on.

From the description, I'm guessing it's lost compression one cylinder at a time until it wouldn't catch at all.  That's why I'd pass on that one unless I could pull the head before buying; odds are if they drove it until that point, they've either warped or cracked the head.  The 626 OTOH, sounds like the guy had enough sense to limp it home and park it when it started smoking and missing.  That could be head gasket or rings, but with the lousy luck I've had with oil pan gaskets lately, the pan is coming off too, so changing the rings and rod bearings isn't a huge leap from there.

Add to that the age of the car.  When you pull those exhaust manifold nuts you think you'll be able to avoid breaking some of the studs?  Have fun extracting those from the head.  We're also talking about new gaskets for the intake and exhaust manifolds themselves, a new valve cover gasket, and since that's an 88 Civic you'd be a fool not to go ahead and put a new timing belt and maybe water pump on it.  How much are we up to in parts now?

ContiTech timing belt, $17.88. Bosch water pump, $33.33.  And IIRC, that is an interference engine, so yes, I should have included the timing belt in the head gasket cost.  No way I'd put the old one back on not knowing its age.  My price for the head gasket was the full kit with everything except the head bolts, which are another $30.

IMO, that would be a better deal if I knew a local junkyard had a totaled one with a complete engine for a good price too.  As I said, my first choice out of the available ones would have been to get the Metro as a "simple fix" and the 626 as a project, though looking both over carefully before showing cash.

Mind you, that's a conversation that a couple of guys who know cars can have.  With the right knowledge any major problem can be made relatively simple.  My point from earlier is reinforced... not everybody has that knowledge, or if they did, new cars would be a lot cheaper because buyers would have more realistic options.

Also, as stated, there are a few of us single guys who know enough to earn some home cooked meals, (and married guys who would trade the work for the wife not having to cook a few nights, or offer to watch their kids some Saturday, whatever gives them an excuse to get greasy and look like a magician when they turn a pile of scrap metal back into a purring motor) and would be glad to help anyone who doesn't know how.  I'm no expert, but I know enough to know when I shouldn't do something to someone else's car that I would do to mine, and I know enough good mechanics to recommend a cheap one.  My old roommate used to freelance with several local shops as a diesel specialist, so I have an inside source on who will cut a good deal and who's just looking for a fast buck.

[unixknight]

All true, but again this is far from a universal solution that's good for everybody.  A tech savy person can do a lot with a beater, but most people can't.  Any old car you buy in a private sale is a craps shoot, and if you're lucky, great.  If you aren't, that money's gone.

[Guest]

So the solution to the sin of debt is getting junky cars.  got it.

[Vort]

9 minutes ago, Carborendum said:

So the solution to the sin of debt is getting junky cars.  got it.

As long as you understand.

[Guest MormonGator]

14 minutes ago, Carborendum said:

So the solution to the sin of debt 

The real solution is simple, practical and has been said 2000 times before. There are a reason the most traveled roads are most traveled. Spend less, save more. 

[Guest LiterateParakeet]

59 minutes ago, Carborendum said:

So the solution to the sin of debt is getting junky cars.  got it.

Lol, I wouldn't say that but it is a solution that works for some of us. I haven't been stranded any more than my friends with newer vehicles. And for that occasionally flat tire or whatever....AAA.

Perhaps you buy new cars but save money (avoid debt) in ways that us used car people don't. No big deal. This isn't a contest.  (Or wait...is it? I'm very competitive so I have to know.  And I win, BTW.)

[Guest MormonGator]

22 minutes ago, LiterateParakeet said:

AAA.

They saved me many times 

[NightSG]

1 hour ago, unixknight said:

All true, but again this is far from a universal solution that's good for everybody.  A tech savy person can do a lot with a beater, but most people can't.  Any old car you buy in a private sale is a craps shoot, and if you're lucky, great.  If you aren't, that money's gone.

That's part of the beauty of the gamble if you go into it prepared; like I said before, I could only be about 90% sure of the problem with the 626 short of stripping it down all the way and taking the head and block to be tested.  90% sure isn't that much worse than buying a $5,000 used car from the typical used car dealer, but I could get 3 90% sures for $1500 and still be $3500 ahead if only one works and I burn the other two in the back yard.  Parting them out on eBay and scrapping what doesn't sell quickly is likely to get at least half the money back on a $500 car, and may turn a profit with some.

1 hour ago, Carborendum said:

So the solution to the sin of debt is getting junky cars.  got it.

Only part of the solution; you have to decide whether appearances are really worth what you pay for them.  If you put aside the potential as a status symbol, having the means to get from place to place with a high degree of speed and comfort relative to walking can be a lot cheaper.  Same for housing; my current bathroom is about the size of my closet at the last house, but I can't bring myself to be overly concerned with the aesthetics of a room I poop in.

44 minutes ago, LiterateParakeet said:

Lol, I wouldn't say that but it is a solution that works for some of us. I haven't been stranded any more than my friends with newer vehicles. And for that occasionally flat tire or whatever....AAA.

Last time I used AAA, it took the wrecker 2.5 hours to find me, after I'd walked a mile to get cell signal.  Granted, I probably couldn't have gotten a timing belt at 10PM on a Friday night, 15 miles from the nearest auto parts store, nor is it particularly easy to put one on and get everything right on the side of the road in the dark with only hand tools and a cheap flashlight in your teeth, but since then I've been "stranded" 4-5 times by things that I ultimately fixed myself in less time than it would have taken to get the wrecker out there.  Actually, the only two times I called anybody for help on those were to borrow tools.  (Well, one was to tell the guy who'd borrowed my jack that I needed him to return it immediately and bring me some fresh batteries for my flashlight while he was at it.)  A couple of the times, it was the first time I'd diagnosed and done the needed repair.  A Haynes or Chilton's manual can teach you a lot when you've got nothing better to do than read it and try stuff.

[beefche]

I just don't understand the thought that anyone and everyone who is in debt is a sinner on that fact alone. Being in debt isn't a sin. How is it sinful in and of itself? Obviously, if it's our greed, then the greed is the sin.

I won't buy a beater. I don't mind buying used, but a beater car means (to me) that I can expect car troubles and I refuse to deal with it breaking down and then having to get it towed, finding a trusted mechanic, etc. Again, I don't mind it being used but if I know that it's a true beater, I'm not gonna do it. I'll let ya'll car people have at 'em.

BTW, I'm thankful that if I need emergency (true emergency, not "I want this big ol' TV now") funds and I run out of the actual cash on hand that I have credit cards to help. While I hate incurring debt, I'm grateful that I don't have to worry about starving or going without medical treatment because I can't afford it now. 

 

[unixknight]

9 minutes ago, NightSG said:

That's part of the beauty of the gamble if you go into it prepared; like I said before, I could only be about 90% sure of the problem with the 626 short of stripping it down all the way and taking the head and block to be tested.  90% sure isn't that much worse than buying a $5,000 used car from the typical used car dealer, but I could get 3 90% sures for $1500 and still be $3500 ahead if only one works and I burn the other two in the back yard.  Parting them out on eBay and scrapping what doesn't sell quickly is likely to get at least half the money back on a $500 car, and may turn a profit with some.

Indeed, but remember my original point was that new car loans are a solution for people who can't drop a bunch of money all at once.  Yeah, it costs a LOT more in the long run, but it isn't hard to imagine circumstances where a person just can't play the used car private sale game.

[thoughts]

Debt is "the state of owing money" according to the dictionary.   It is true you can have debt that is especially stupid by paying more than something is worth (and that tangible goods or going into debt for food fit into that stupid category).   But we have been counseled by our leaders in GC not to go in to debt except for homes and education, both of which traditionally could be seen as investments (as would a business with a solid business plan).  Even in those cases we've been counseled to buy smaller homes and chose our education wisely.

It is GREED and ENVY that are the sins that often lead to debt.   And THEFT, a sin, which occurs when you put yourself into debts you cannot pay (though most bankruptcies are from unexpected and non-elective expenses like medical debt).

So my take is the the OP is simply wrong.

[Guest LiterateParakeet]

27 minutes ago, NightSG said:

A couple of the times, it was the first time I'd diagnosed and done the needed repair.  A Haynes or Chilton's manual can teach you a lot when you've got nothing better to do than read it and try stuff.

Is your goal to persuade everyone in this conversation to buy new cars and never buy used....because if it is, good job. 

Seriously you are going to scare even me away from used cars.  AAA always comes and changes my tire, jumps my battery when I leave the lights on, and unlocks my door (when the keys are inside) in an hour or less.

[Guest LiterateParakeet]

30 minutes ago, beefche said:

While I hate incurring debt, I'm grateful that I don't have to worry about starving or going without medical treatment because I can't afford it now. 

I've know many families  (myself included) to get in some serious debt that way. That isn't the answer. It is much better to have a savings account for emergencies, and if that runs out, humble yourself and ask family and if they can't help, go to your Bishop. 

[Guest]

1 hour ago, LiterateParakeet said:

Lol, I wouldn't say that but it is a solution that works for some of us. I haven't been stranded any more than my friends with newer vehicles. And for that occasionally flat tire or whatever....AAA.

Perhaps you buy new cars but save money (avoid debt) in ways that us used car people don't. No big deal. This isn't a contest.  (Or wait...is it? I'm very competitive so I have to know.  And I win, BTW.)

I'm getting the impression that you believe I buy new.  Quite the contrary.  I've only bought one new car in my life and it was a pretty cheap one.  Even then I recognized my mistake.  I've listened to Dave Ramsey ever since.

[Guest LiterateParakeet]

12 minutes ago, Carborendum said:

I'm getting the impression that you believe I buy new.  Quite the contrary.  I've only bought one new car in my life and it was a pretty cheap one.  Even then I recognized my mistake.  I've listened to Dave Ramsey ever since.

You're right, I misunderstood you. Right now I'm reading Suze Orman. Should I read Dave Ramsey next?  Serious question. I've heard a lot of good things about him, but mostly about getting out of debt.

Edited February 19, 2016 by LiterateParakeet
Stupid autocorrect