Thursday, October 2, 2008

A Layman's Look at the Bailout

As a pastor, I am not considered a layperson in church terms. In banking terms I am a layman! I am not a banker, or the son of a banker. I am not an economist. I realize that some have a broader view of the economy and understand the globalized money markets better than I do. Nonetheless, I have a few thoughts on the current financial crisis.

First, let me say that I am interested! I have lost 33% of my retirement savings in the last few months, and I did not have much to start with. So, I don't make these comments carelessly. Furthermore, I feel most strongly for older investors who are retired and living on a 401-K or other investments that have also declined by roughly 33% like mine. They don't have 30 years of work and future investment ahead of them to heal from this fall. I feel most for them. Many of them have been very responsible, yet are caught in the web of others irresponsibility.

Second, let me say that the idea of the government bailing out anybody is a disgusting thought to me. Republicans say that we need to bail out the bankers. I say, those irresponsible folks have been offering despicable loans (Ezekiel 18:8) and advice to people for the last few years that I end up hearing about in my office through the tears of people who are about to lose everything. They have been so irresponsible, offering balloon notes and often hiding the fact from the consumer! They have encouraged people to roll their credit card debt into their home loan assuming virtual collateral in the house that was inflated and not really collateral at all! Bail out the banks, no way. Let them fold, close, and learn not to offer these horrible, greedy, unprincipled products to the public.

Third, the Democrats are saying that the bailout needs to bailout homeowners who are facing foreclosure. Again I say, no. If you are a consumer who went for one of these loan products that seemed to good to be true, then think better next time and live within your means like a responsible citizen (Proverbs 6:1-5)! I know scores of people who are upside down on their house and having trouble with the payment. I truly feel their pain! I am praying for them. However, many of them make far more as a household than I do, some up to three times what I earn in a year. Yet, I am making my payments and paying my bills, even as my bills (insurance, gas, utilities, food) have skyrocketed this last year! I too work a second job for further income as many of them do. I understand the pinch, but I see the root of the pinch, irresponsibility. We have made financial progress and increase an idol which we worship!

Here is my bailout package, Paul Scheperle style.
Let's give the 700 billion to the responsible citizens who are paying their bills and living within their means. This is a reward package, not a bailout. My income is a couple thousand dollars per year more than the median income reported in the 2,000 U.S. census for a household. I pay my for my wife and children's individual health insurance policies out of that taxable income. I am eligible for government (Sate of Missouri ) health insurance (based on income), but I choose not to receive it. And, in 2008 I am paying my bills, and current on everything. Let's stimulate/reward the responsible people, rather than bailing out those who have acted irresponsibly.

How do I make it? Honestly there are times when I am not sure! But I know this, I budget so that I can be sure to pay my tithe (10%) to my local church (Malachi 3:10), and give to missions work and aid around the globe as well (Acts 10:5). By being a cheerful giver (2 Corinthians 9:7) you learn to live WAY under your means and you look for ways to save money so that you can give to others. At the end of the year you can compare your gross income listed on your W-2(s) with your giving records. You may find that you gave 12-14% or even more to God's work. Don't think you can give to get (James 4:3), but understand this, God gives back to a cheerful and content (1 Timothy 6:6) giver.

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