Introduction
Nowadays, almost every sphere and institution nationwide has to remain independent of the Church and act in the best interest of its citizens even if the decision does not adhere to the religious dogmas. Among the areas that are not controlled by the main principles of God is the financial sector. On the one hand, the Federal Reserve’s monetary policy can be based on lowering interest rates and making the debt look cheaper (Bernanke, 2020). On the other hand, monetary policy can be focused on increasing interest rates (Bernanke, 2020). The monetary policy adopted after the financial crisis of 2008 involved lower interest rates, which made people borrow more money and went against the Christian principle of debt.
Government Overreach: How Economic Policies Have Strayed from Biblical Principles
After the recession, the economy remained fragile, and it was the responsibility of the Federal Reserve to help it rebound. The country’s GDP grew by only about 2 percent per year on average during the initial four years of the rebound, which is considered low compared to historical growth rates (Kuttner, 2018). There were also concerns about the quality of the jobs being created, with many being part-time or low-paying (Kuttner, 2018). During this time, political tension was especially felt since the Democratic party and the presidency of Barack Obama were expected to push policies in the right direction to weaken the effects of the recession on the citizens (Kuttner, 2018). Therefore, there was a need for a policy to help the economy recover.
In turn, the Federal Reserve responded to these challenges by keeping its target interest rate at an extraordinarily low level. This action was done amid persistent instability and continued to stimulate borrowing and investment (Kuttner, 2018). The main goal of this monetary policy was to convince the public that interest rates would remain low and stable (Kuttner, 2018). This would continue until the economy rebounded and economic growth and employment rates improved (Kuttner, 2018). As a result, with this approach, the Federal Reserve tried to induce more spending and borrowing from people, emphasizing that debt is cheap.
However, the teachings of God are based on nurturing kindness within people and eliminating any vices. With this in mind, one of the principles of the Lord is based on a refusal to borrow. It was mentioned in Romans 13:8 to “keep out of debt and owe no man anything, except to love one another” (Bible Gateway, n.d.). As a result, any person who would tempt others to borrow for personal gain would be considered a sinner. Therefore, when considering the role of the Federal Reserve, it can be seen that it overstepped the principles of God by inducing spending and borrowing.
Conclusion
Hence, lower interest rates were part of the monetary strategy that followed the 2008 financial crisis, but this encouraged increased borrowing and went against the Christian view of debt. With the support of this monetary policy, the general public was persuaded that interest rates would remain constant until specific economic criteria, notably improved employment levels and quicker economic growth, were reached. Still, according to God’s principles, no person should pursue debts, and people should try to avoid owing something to others. Therefore, in God’s view, anyone who would induce others to borrow for their advantage would be regarded as a sinner.
References
Bernanke, B. S. (2020). The new tools of monetary policy. American Economic Review, 110(4), 943-83. Web.
Bible Gateway. (n.d.). Romans 13:8. Web.
Kuttner, K. N. (2018). Outside the box: Unconventional monetary policy in the great recession and beyond. Journal of Economic Perspectives, 32(4), 121-146. Web.