Financial Follies

One of the more notable and persistent frailties of the human race has been its avarice in the lending of money, its poor judgment in the acceptance of credit. Jesus of Nazareth felt strongly enough about greed that he overturned the tables of the moneychangers in the temple saying, "You make it into a den of robbers" (Matthew 21:13).

In those days Caesar Augustus and his financial establishment tried to solve their balance of payments problems by taxing much of the known world, which was the reason for Joseph and Mary's hallowed trip to Bethlehem. Despite these levies the Roman empire ultimately fell, in part because, according to some historians, its emperors were unable or unwilling to control the issuance of money and credit. For example, veterans of the legions were given small farms as pensions, but they were frequently lost to mortgage lenders who combined the small farms into large estates.

Now, almost 2,000 years later, we inhabit an enormously more crowded and interdependent world of some four billion people. The poorest nations owe more than $500 billion to the rich, the major portion lent by U.S. private banks, with those of Western Europe not far behind. Twenty-six countries now claim they cannot meet the interest payments on these debts, let alone the principal.

The resulting crisis could bring down the house of international finance. And as in the past, the burden of rebuilding the house falls on the taxpayers of both the United States and some of the world's poorest nations.

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