The idea that rent money is “dead” money has been around a long time.
What is not said so often is that interest money is dead money too. This is not realized because people are under the mistaken notion that you can recover interest that you’ve paid, but you cannot recover rent that you’ve paid. It’s a mistaken notion because this is true only in an appreciating market. In other words, you can “recover” interest only if prices rise. And when prices don’t rise, or don’t rise enough, you won’t recover all or some of the interest you’ve paid.
Imagine this: you rent a house for 25 years and pay the rent on time. The landlord pays off his home with your rental money. At the end of 25 years you do not own the house; you merely walk away when you go and leave the asset to its owner.
Once you borrow, you join all borrowers and now you have a vested interest (pun intended) in price increases in the housing market.
When you buy a home, however, you might pay double the price over 25 years because of interest. Let’s say a $200,000 home, and after 25 years you’ve paid $400,000. Now if property values were to double over those 25 years, you could sell your home for $400,000 and recover all the interest you’ve paid as well.
But what would happen if you could only sell your home for its original $200,000 purchase price? Why, the interest you paid would be “dead money” — just as dead as if you rented through those 25 years. Why is it dead money? Because you could not “recover” it in the sale price of your home.
“If not another penny was borrowed starting now, and we started to pay back all that debt at a rate of one dollar per second, it would take over 100,000 years to pay it all off.” —Scott Craig Mooney
Debt and usury are tied together. This is the thesis of Scott Craig Mooney in his original book on the topic, Usury: Destroyer of Nations. Now he’s returned to the fray with a small—but powerful—reminder that we’re in economic trouble. The Fall of the House of Usury
Mr. Mooney is concerned that no one is talking about what is really wrong, and what is really wrong is usury. The reason for the lack of discussion on usury is simple: no one really believes it is a principle to be found in Scripture and practiced today. One of the reasons for this is the apparent “refutation” of usury by John Calvin.
Calvin effectively undercuts biblical law theory.
The contents of a letter by John Calvin to Oekolampadius provides us with insight into the great reformer’s view on the topic of usury. It also provides an opportunity to view any biblical arguments that might be found to support the pro-usury position.
Calvin’s position, however, appears somewhat ambiguous. For example, he argues on the one hand that “there is no scriptural passage that totally bans usury.” This is true, but the issue at stake today is not whether there is a general ban on usury, but whether there is any ban at all on the charging of usury. The Old Testament did not place a total ban on usury: it allowed usury to be charged to foreigners.
While he is not prepared to argue against usury on biblical grounds, Calvin nevertheless attempts to put moderation on the charging of interest. He prefers that “usurers were chased from every country.” Hardly an endorsement for usury.
- See Scott Mooney’s book, Usury, for an explanation of the meaning of ‘foreigner.’↵back
Usury is impudent financial mismanagement.
Reading through the disciplinary actions of the Ecumenical Councils of the early church can be an eye-opener. The Councils might often be known for the theological issue that was paramount at the time, but the Councils also issued canons that were intended to regulate practice of the faith.
Thus, for example, the Council of Nicea (325 A.D.), addressed the Arian issue, the dating of Passover, but also issued 20 canons on a range of issues. There were many canons regulating bishops and priests. For example, a man who castrated himself could not be ordained. A bishop, priest or deacon could only live with a woman who was his mother, sister, aunt, “or any other woman completely above suspicion.” A bishop or priest who left his congregation could not be installed in another congregation. A bishop could not ordain someone to the priesthood who had been rejected by his own local bishop. Orderly conduct was the order of the day.
But Canon 17 states,
Seeing that many of those enrolled in the clergy, being full of greed and of a shameful money-grubbing spirit, have forgotten the sacred word which says that ‘he did not give his money out for interest’ and who in lending out their money require a certain percentage in return, the holy and great council has judged it just that if anyone, after the publication of this decree, takes interest for a loan or, for whatever reason, holds back half of the loan or invents another thing with the mind to realize a shameful profit, he shall be deposed from the clergy and taken off the clergy list.”
The Council recognized a issue. Interest rates were established by Roman law, apparently running at 12% per month. There was certainly money to be made in the usury market.