www.byzcath.org Forums Faith & Christian Life Faith & Theology Ethics Puzzle

Why will government lenders take risks with other people's money (the taxpayers') that private lenders will not take with their own money (lenders' funds)?

What is the implications of this in relation to Christian principles?

Stupidity.

In general, I follow the old principle of "neither a borrower nor a lender be". I don't use credit cards. If I need something, I save for it. And like the good Germans, I try to save 20% of my income "for a rainy day". I think our government should do the same thing.

Blessings!

Edwin,

As an American with little experince outside this great country, I cannot answer your question. You see, in America we have something called 'democracy' or 'self-government'. Public funds are controlled by the public. Our system is not perfect, as nothing in this world is. But, compared to your example of the private sector, the American government is much more accoutnable to the citizenry than private corporations are to their shareholders.

For us, the Christian ethical issue might be the moral duty to vote and participate, which sadly too few citizens do.

God bless the USA!

K.

Kurt,

I wasn't including all American corporations, but "lending institutions", companies that have to decide whether to use their clients' money/investments to give you a loan. The government can make up for its poor decisions by simply taxing more, private lending institutions take risk with a limited cash reserve. Anyway, I thought our country was a "Representational" form of government; we elect officials to do what they want.


Dr. John,

Here is the definition of 'credit card debt':

PURCHASING THINGS WE DON'T NEED
WITH MONEY WE DON'T HAVE
TO IMPRESS PEOPLE WE DON'T KNOW.

Edwin,

I see, you are only talking about one, narrow function of government.

Government lending is done for a social purpose and therefore may carry a higher risk. The majority of this woudl be student loans and mortgages to veterans and working families. We believe that higher education serves a public good. We recognize that almost all undergraduates and many of their parents would not qualify for commerical loans, or, if they did, it would be at prohibitedly high interest rates because of the risk. The same too for mortgages. We, as a society, want to encourage first time home ownership.

I think the issues you raise are very appropriate for this Byzantine forum, as many of our people are of the economic strata that benefits from these loan programs for home ownership and higher education.

K.

P.S. As to your other point about Representational government, I happen to beleive strongly in our country and our system of government, but that is a discussion for another day.

K

[ 12-27-2001: Message edited by: Kurt ]

Kurt,

Thanks for your response. Here is the issue: the government grants loans using taxpayers' money but without any earnings attached to it. The lender/taxpayer gets nothing out of it. In private lending both the lender and the one getting a loan make out; the lendee gets a mortgage or loan and the lender gets a return on his or her investment; andd the lending institution as the middle-man gets some from the transaction. Yes, the private lending institutioins charge a higher rate and have higher standards because the risk is a major factor. The government, on the other hand, can lower its standards with a resulting default rate because it will transfer the risk to the taxpayers, those who do not benefit from their government playing the role of a bank.

Can this ethical dilemna be transferred to education? For example, since Johnny can't make the grade, the school lowers its standards just for him while making you, Kurt, work harder for the same grade. If the school did not lower its gading scale, Johnny would not get the same opportunity to earn the same GPA as you.

I don't think the education example works.

As to your point the taxpayer do not benefit, they in fact do. They benefit from an educated citizenry and workforce. Employers now have an educated pool of potential employees to draw upon, etc. Great social good, a central principle of Catholic social teaching!

K.

Kurt,

I think the education example is a good parallel. You just don't want to answer whether you think it is a common "good" if Johnny can get an A+ with a much lower standard when you have to study like h*ll to get a B-. Is this a good example of Christian charity? Now let's say you and Johnny compete for the same job. The employer only uses one's GPA as the sole criterion for hiring. They pick Johnny because he got A+'s while you only got B-'s. Where is the common good. How did you benefit?

Let us now return to the loan example. You make more than Johnny (from working two jobs since Johnny took your other job) and have no bad credit history. Johnny, on the other hand, has a poor credit record. Johnny gets that house you and he were looking at "up on that hill". You were turned down from a private lender but Johnny not only got a government loan but assistance to make the monthly payments. Can you point out the common good? How did you benefit?

[ 12-27-2001: Message edited by: Edwin ]

Edwin,

No need to use abstract examples. The largest government loan program is student loans. So let use the real life example.

Some people have the economic means to afford higher education for themselves or their children. Other people do not. How they got in that situation is certainly due to varied reasons. To say that all economic differences are due to personal initiative is a theory that certainly the Church rejects and is contrary to Catholic social teaching.

The flaw in your school example is, of course, you have the same institution using different criteria. But the issue of discussion is of two different actors. Commerical banks set uniform standards for loans (well, they are supposed to, the common exceptions -- redlining, insider loans, etc, we can dicuss later). Tose who they choose not to serve, the government provides loans for in some circumstances such as higher education.

Of course, our Catholic colleges and universities are a major beneficiary of this program and are quite active in promoting their continuation and expansion. Little doubt exists that Catholic higher education would almost be eliminated in this country without these programs (maybe a virture to youor others).

K.

How the government works for you:


http://foxnews.com/story/0,2933,41631,00.html

As for education, Kurt, I would recommend that the money we spend for failed public schools be given back to us (or not taken from us in the first place) and we can spend it on the education for our children we want. Yet those who DO use Catholic education sometimes have to pay double (once for a school system that is pathetic) and a second time for the parochial school. And if you are Byzantine Catholic and not a member of the parish school you have to pay double tuition. Do the math: it ends up being three times the regular cost that taxpayers have to pay to send their children to a local public school subsidized by taxpayers' dollars. This is a big issue in the Byzantine Church and why this ethical dilemna hits home. Many families have left our parishes and become RCs to benefit from a less costly education at the school of their choice. With all the talk of freedom of "choice" why can't it be applied to the area of education? Why are we given the choice to abort our babies but not send our children to better schools where one doesn't have to worry about children carrying guns and knives? Why are there so many double standards for hard-working blue-collared folks in the country, Kurt? Why doesn't the government work for them the way it does for others? Why is there only a segment of the population who can benefit in the "common good"?

[ 12-27-2001: Message edited by: Edwin ]

Edwin,

I have no problem with public assistance to Catholic elementary and secondary schools. I am only puzzled why you appear to object to public assitance to Catholic higher education. Let us try to be consistent.

As for your recommendation of the Fox story on the pro-abortion Cato Institution's critic of Social Security, it is an extremely flawed diatribe.

Social Security has its origns in Catholic social teaching, a social insurance model rather than welfare. Msgr. John A. Ryan of the US Bishop's Conference, was instrumental in its creation and used the resources of European Catholic social thinkers.

The premise of the Cato statement is that Social Security actuarial balance cannot be projected out indefinately. You (and I credit you) in your original post rightly use the private sector as a tool of measurement rather than some abstract ideal. No private annuity can project anywhere near the extent Social Security can. Most could not project a guarantee for the next five years and few could for the next ten years. So, Social Security, whatever its faults, already beats the private sector.

K.

P.S. My thanks to the American bishops who have not forgotten the important role they played in the creation of Social Security and continue to advise policy makers to reject the type of propaganda the liberatarian Cato Institute puts out. Many Years!

K

Kurt,

You forget that Social Security was originally a savings plan, but was switched to a program where money from one pool of people (working people) was transferred to another pool of people (elderly/retired) when President FDR realized that his constituents were not getting money as was promised. Elections were coming up and SS was socialized to get the money into the voters' pockets quicker. Again, the common good was a particular pool of voters, not all the people.

Edwin,

Interesting. Social Security and social insurance programs are my field of experise. I've written monographs,testified before Congress, etc. and never heard of this switcharoo. Could you name the legislation which authorized this or the Executive Order of FDR?

The U.S. Catholic Bishop's Conference is also unaware of any such amendment, but they likely don't have the interaction youhave with the pro-abortion Cato Institute.

K.

[ 12-27-2001: Message edited by: Kurt ]

Kurt,

I don't have any interaction with any group, Cato or otherwise.

Well, Edwin, try to get out more. You may find millions of people who depend on and benefit from social insurance. best wishes for a happy new year.

K.