At thy right hand there are pleasures for evermore (Ps. 16: 11)
“The rich ruleth over the poor, and the borrower is servant to the lender” (Proverbs 22:7).
The gist of this famous proverb is both obvious and wise. Rich people have way more influence than do the poor, and so it makes sense that the rich are the ones who call the shots. By the same token, as an example of the former, the person who is in the debtor position is beholden to the one who is the creditor. So much is clear, and these are words to live by. Avoid debt. Minimize debt. Pay off debt.
At the same time, because we are dealing with people and not with math on a page, there are some variables. I would not call them exceptions, but we do need to recognize the variations.
The Scriptures do not condemn being in debt as a flat out sin. The Lord Jesus requires us to lend when we can, doing so with an open hand (Luke 6:34-35). The Old Testament law requires lending to the poor, but without the use of penalizing usury (Deut. 23:19), or taking any of his essentials as collateral (Deut. 24:10).
So unsecured debt is unfortunate for the same reasons that slavery is unfortunate. If a man borrows a thousand dollars, then he is servant to the lender. This is why Paul says to owe no man anything, except for the debt of love (Rom. 13: 8).
But suicidal empathy can afflict the wealthy, and that can come out in perverse ways. There are times when the situations are reversed, and the creditor becomes the debtor’s slave. If I borrow a thousand unsecured dollars, you’ve got me. But if I borrow a hundred thousand unsecured dollars, I’ve got you.
Another variation is this. I have been using the term unsecured. There is a difference between an unsecured poverty loan, taken because the person is hard up, on the one hand, and a fully collateralized home loan, for example. If the homeowner gets in financial trouble, he can always discharge his obligation by means of the home. He has not extended his arm farther than he can draw it back.
One last example. There is a difference between a business investment and a business loan. In a business investment, the entrepreneur does not owe anybody anything apart from his best effort and hard work. The investor is assuming the risk, and doing so knowingly. With a loan, if the people involved have any sense, it will be collateralized.
In the meantime, Polonius in Hamlet was not a wise man, but he did say a wise thing.
“Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.”
