Thursday, October 17th, 2019

US Debt is the Monster In the Closet


US DebtThere is a monster in the closet. 

And it seems like everyone wants to ignore it.  Notice how almost every politician wants to debate the issues, but almost none of them want the face the big issue.

The US has mortgaged not only its own future…but at the same time much of the rest of the world.

If you don’t think that the recession and the buying habits in the US will affect other countries, then you’re not noticing how many countries sell products into the US.  What’s going on here will affect everywhere else…at least to some degree.

The sad part is that this debt monster is raging both in the government and in personal lives.

The country is broke…and population with it.

Debt has become an accepted way of life. 

Look at some of the  “solutions” which have been taking place to “solve” the economic crisis.

The car makers had way too much debt…so let’s help them out by running a “Cash for Clunkers” program to get rid of old cars by having Americans buy brand new cars…based on debt. 

Wow…the car companies are in trouble with debt…and the best solution was to transfer more of the debt to the general population!

Can you see how debt has consumed our culture?

Look through ads and sometimes you find it difficult to find out what the price of anything is…because so many items are sold in 72 easy payments of _______.

Credit card offers start pounding young people the moment they’re ready to go to college.

Car loans which used to be on 48 month terms go all the way up to 72 months and higher…on a product which loses 20% in value the first year you own it.

And most people consider “their home” their biggest investment asset.  Where you live is not your investment.  It’s your housing.  Investments produce income.  A home you own which you rent out is an investment.  The home you live in is a liability.

Why is this important from a Christian perspective? 

“The rich rules over the poor, And the borrower is servant to the lender.”
Prov 22:7, NKJV

Or how about we make it even more clear…

“The rich rules over the poor, And the borrower becomes the lender’s slave.”
Prov 22:7, NASB

The borrower is the lender’s slave.  If you’re in debt, you’re a slave to the mortgage company, the automobile financier, and the credit card company.

You’ve willingly sold your future to them…for an object which likely won’t last as long as the bill does.

I remember when I first got this scripture inside of me.  I was deep in debt at the time with both a debt on a new van and tens of thousands on credit cards.  No real assets to speak of. 

It was a painful realization.  I had willingly chosen to go into slavery to the debt companies. 

We made a decision.  We were going to honor God’s Word and work on getting out of debt.  We quit buying things…except the bare essentials such as food.  We quit going out to eat.   We decided to live within our means…which weren’t very good at the time.

And with that we made a committment before God to start paying extra on our bills.  Even if it was a SMALL amount such as $5 extra that came in, it went toward paying what we owed. 

That is how we took a step of faith on this committment.  We acted on it.  It was so easy before this point to simply take any extra money which came in and spend it on ourselves. 

There is something about making a committment and dedicating to a purpose.  It gives God power to work in our lives.

Over a couple of years our income grew and those debts all disappeared.

I remember the first couch we bought…with all of our OWN money. 

It felt different.  It felt free because it wasn’t the bank’s couch.  It was ours.    It’s hard to explain it until you’ve felt this same feeling. 

We were able to save up the money to put a down payment on a house.  But this also meant we were in debt again.  We felt free to do this as our payments were a little less than our rent was at the time.  

So at that point we followed the same model again.  Purchases stopped.  Payments were concentrated on the house even though the house had several rooms with no furniture in them.  Soon it was paid off.

We bought our next home (the one we live in now) without borrowing for it.  As you can imagine, that felt really free…a house that was ours from day one.

I’m not saying any of this to brag…except on God.  He is faithful to fulfill His promises to us when we make the decision and take action on what we believe.

Debt is an enemy that we’ve all allowed to enter our lives.  And it has destroyed the economy.

It seems like the media keeps talking about how the recession will end…and how everything will go back to normal someday. 

It won’t.  It can’t.  Because “normal” for the US has been an ever-deepening grave of debt. 

I don’t know what this will mean the world long-term as we can’t control the actions of others. 

But I do know what it can mean for us personally.  Make a decision to treat debt as the enemy.  Make a decision to live within your current means.  And make a decision that at least for your family…debt is not going to be your normal way of doing business.

About Terry Dean
I've been in full-time business online since 1996. I've been an ordained minister since 1993. Yes, business and ministry are my passions. I also love God, my wife Julie, my two dogs, the outdoors, and video games.


7 Responses to “US Debt is the Monster In the Closet”
  1. Bret says:

    Terry –

    I agree with you 100%. Other than our house, my wife and I paid for everything when we purchased it.

    Now we are working to pay off our house, but have been slowed down by the economy and its impact on business.

    The one thing that the U.S. needs most right now is to develop delayed gratification. With the internet and now smart phones everything is at our fingertips instantly when we need it. So it would make sense that people would think the same should happen with the things they want to buy.

    And the government is making things progressively worse by making everything a “right”.

    A great example of this is Safelink Wireless which now offers free cell phones and minutes to people who qualify for government welfare programs.

    I didn’t know that having a cell phone was a human rights issue, but apparently the government believes that.

    People need to take responsibility for their own actions and be willing to do what is necessary legally and morally to provide for their families.

    Maybe the revolution of living the debt free life can start here.

    I despise monthly payments and avoid them whenever I can.

    Soon my house will be paid off and then I’ll be more free.

    Thanks for your post. It was refreshing.

    • Terry Dean says:

      @Bret – You have to wonder when having a cell phone was a human rights issue? People are sometimes shocked when I tell them I have a prepaid cell (pretty cheap at that). No iPhone here. I have to have a hard line for my business since I do teleconference calls at times and I simply don’t use the cell much.

  2. Junior says:

    Hi Terry

    I agree with a lot of what you’ve said, however I think you’re ignoring a large part of debt. A lot of the debt that you’ve talked about above is related to “bad debt” or debt, that you have to pay for, and that can definitely be debilitating. I feel the verse in proverbs ring true with this one

    But how about debt that other people pay for you. For example, if you take out a loan to start up a business, or if you are a property investor and have multiple mortgages on your houses. In this situation, you’re not paying for your debt from your own pocket. The business is paying for it, and so are the tenants that live in your house. What would you say about those kind of debts, and does the verse in Proverbs still apply?

    Many Thanks

    • Terry Dean says:

      Hi Junior,

      So you’re asking about debt which is used as an investment so it produces income. I agree with you here, at least to a point. Even for my own home I was willing to go into debt again because the payments on the debt would be less than the rent of the house I was in. So it did produce an asset over time….which I pushed to get out of debt as soon as possible.

      The same principle would apply to a rental house or a business you control. For most investment properties and most business start-up loans you have to personally sign for them. So you are still responsible for them…and not all businesses and properties increase in value.

      What is the failure rate on new businesses for example? Over the first five years it is very high (although when you look at the often quoted stats many of them are an exaggeration of the original studies).

      So I caution people here to think and prayer about these kinds of debts also and not be so quick to take them. In fact in business I’ve seen many people take the path of least resistance such as borrowing instead of finding other ways to finance their projects such as investors who come in as a partial owner of the company. On rental houses, I’d personally avoid “zero down” type loans because it would be much safer from a cashflow standpoint in most cases with a higher down payment than this.

      And in those situations, I’d still hate the debt with a passion…because I’d still see myself as an employee/slave to the bank. It’s not your house. It’s the bank’s house until you pay it off. I don’t see anywhere in the context of that verse (the verses around it) that it separates good debt from bad debt.

      We have become way too quick to take on debt of any type…and even in the debts which are investments I’d caution people to spend more time in prayer about them and looking at any other possible options available.

  3. Junior says:

    @Terry Dean

    Hi Terry

    Many thanks for your prompt reply. I do agree that debt can be and is used as a killer to the large majority of the population. However, there are sometimes where you voluntary get into debt because of the rewards that it can produce. That is what I mean by “good” debt. What we must assess therefore is which opportunities should we voluntarily get into debt for, and not the avoidance of debt all together. Does that make sense? In other words, its not about not having debt, but having debt for the right reasons with the ultimate view of becoming debt free.

    The failure rate of businesses in the first five years is high. However, the rewards of building a business can be huge. You yourself are living proof of that. So to choose which venture to get involved in, you need wisdom. Which also means you need prayer and that is where Proverbs comes in. From your article you appear as if you are against debt. I apologise if that’s not the case.

    Many Thanks

    • Terry Dean says:

      Hi Junior,

      There are cases where debt does make sense. Buying your own home is one as long as you don’t borrow as much as the bank is willing to lend you. That is more risky than needed. And in any business you have to make sure you go in with your eyes wide open knowing all the facts. Entrepreneurs by nature are optimistic and we have to make sure we don’t allow that to cloud our judgement.

      In addition, I do have a credit card for personal use and a credit card for business use. They are both paid off regularly online (like every week to 2 weeks), but these are debts. They are simply used for concenience. I have debit cards of course also, but I feel safer using the credit card online along with the rewards given with it. And all of us have utlitiy bills which charge us after use…which could be considered debts as well.

      If people eliminated their heavy reliance on debt…and took an attitude that prayer and meditation must be made on any debt before moving forward, they would solve a majority of their problems right there.


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