Forgive us our debts.

Would you pay off a debt rather than buy needed medicine for your sick child? That's the choice many nations face in juggling their international debt and their developmental needs. Patrick McCormick examines the growing level of personal debt as well as crippling international debt and decides it's time to come to terms with what we really value.

You load 16 tons, what do you get? Another day older and deeper in debt. Saint Peter don't you call me cause I can't go. I owe my soul to the company store.

--Merle Travis, "Sixteen Tons"

For the last two years one of the hottest tickets on cable has been Lifetime Television's weeknight game show Debt--a snappy retro '60s quiz program hosted by the ever charming Wink Martindale. Unlike Jeopardy and Wheel of Fortune, however, the contestants on this dinnertime game show don't compete for fancy prizes and trips, but to pay off $6,000 to $20,000 of consumer debt. If the show's first two seasons are any indication, there are quite a lot of folks out there eager to play along with Martindale.

Of course if your channel changer happened to bring you over to The News Hour on PBS any evening last summer, you may have watched a few episodes of International Debt--a rather more serious game show, in which struggling countries like Indonesia and Russia try to win anywhere between $6 billion and $22 billion in debt relief from creditors like the International Monetary Fund (IMF), the World Bank, and a number of First World nations. These folks, however, aren't quite as charming as Martindale.

Running on empty

The success of Debt flows no doubt from the increasing indebtedness of American households. In spite of the much-touted economic recovery, low interest rates, and spiraling ascent of Wall Street over the past few years, more and more American families find themselves sinking deeper and deeper in debt. In 1997, consumer debt--not including mortgages--reached the all-time high of $1.25 trillion, up $58 billion from 1996 and nearly 60 percent since 1992. And mortgage debt, which has increased as growing numbers of consumers convert high-interest credit-card and auto-loan debt into cheaper home equity debt, has climbed to $3.7 trillion. In raw numbers, the average household credit-card debt--often being paid off at 18 percent or more--has grown from $1,600 to about $3,400 in the past decade. As Vince Passaro notes in Harper's magazine: "The average American household now carries debt nearly equivalent to its disposable income." Many see this as the maximum debt threshold for consumers, yet the debt burden continues to grow.

The weight of this increasing indebtedness has cut into our national savings rate and forced millions into bankruptcy. In The Overspent American (Basic Books, 1998), economist Juliet Schor reports that Americans currently save only 3.5 percent of their disposable income, about half of what our parents used to set aside for a rainy day. It's less than a third of what Italians, Germans, French, and Japanese households currently put into savings. Schor writes, "60 percent of American families have so little in the way of financial reserve that they can only sustain their lifestyles for about a month if they lose their jobs."

It's also worth noting that in 1997 personal bankruptcies reached an all-time record of 1.3 million--an increase of 20 percent over the past year and better than 60 percent since 1994. The only good news here is for folks employed by bill collectors or consumer-credit counseling agencies. Their futures look secure.

What's behind the current debt binge? Schor argues that two decades of flat or declining wages for most Americans has meant that keeping up with those who are doing well requires going into debt. She also reports that in the "new consumerism" of the '90s, more and more of us think of personal computers, CDs, sports-utility vehicles, and expensive vacations as basic necessities of the good life.

Others claim that credit-card companies have made it all too easy to run up huge, unpayable bills. Passaro notes in Harper's that in 1997 "banks and other credit institutions pummeled us with 3 billion pitches for new credit cards, which amounts to 11 solicitations for every man, woman, and child in the nation." Others suggest that millions of Americans are fiscally illiterate and don't understand enough about credit and debt to stay out of trouble. A recent piece in The Futurist says that "38 percent of 12-year-olds don't know that a boom box will cost more if they paid with a credit card over a three-month period rather than with cash." No wonder. Only 14 states require that youngsters be educated about personal finances, and in many places schools use curricula and materials supplied by Visa and MasterCard.

In US News & World Report, Margaret Mannix reports on a number of ways people who aren't lucky enough to win money from Martindale are getting out of debt. The first step is to assess the problem and identify the worst culprits contributing to your debt crisis. The number-one villain usually turns out to be high-interest credit-card debt. As Mannix notes, keeping a monthly balance often on several cards--that needs to be paid off at 18 to 22 percent makes little or no sense. To keep from using them, some folks freeze their cards in the ice tray, others take the scissors to them or replace them with debit cards.

Others are getting help from consumer-credit counseling agencies--where they are learning to get control of their spending-or tapping into the swelling ranks of the simplicity movement--which encourages Americans to spend less time watching TV commercials or trolling at the local mall and invest more energy in creative activities and hobbies that bring us into contact with other people. As Schor writes, the lesson for many in this process is that having more does not make us happier, and that we can make better choices than the ones recommended by commercials and credit-card companies.

Payment due

It's not just American consumers who are in debt. Over the past two decades the international debt of Third World nations has mushroomed into a global economic crisis, wreaking havoc in the lives of billions of people and dismantling social and economic infrastructures in dozens of countries. As of 1995, developing nations had an external debt of $2 trillion, a fourfold increase since 1979. This is in spite of the fact that both the principal and a good deal of interest on most of the original loans--made in the '70s--have been repaid.

From 1982 to 1990, developing nations paid about $420 billion to Western banks, and still every year Third World countries hand over to the West three times more in debt repayment than they receive in aid.

And just how much money does this represent for these nations? Latin America's external debt is equivalent to 36 percent of its gross national product (GNP), while Africa's debt is equal to 83 percent of its GNP. The cumulative debt of sub-Saharan Africa (not counting South Africa and Namibia) is about 120 percent of the total income of that region. Currently, each person in the Third World owes about $420--significantly more than a year's wage for many--to the West. For many highly indebted poor nations these numbers mean that the debts are simply unpayable.

The harms of this debt are enormous and numerous. In order for highly indebted nations to make their regular debt payments and comply with structural-adjustment policies (SAPs) imposed by the IMF, they must cut spending in health, education, and welfare.

Currently, African nations spend four times as much on debt repayment as they do on health care. And the most highly indebted poor countries have significantly higher rates of infant mortality, illiteracy, malnutrition, and disease than other developing nations.

Furthermore, SAPs require that debtor nations increase their profits from exports. This often results in the loss of small farms, increased unemployment, dropping wages, and a growing dependence on imported staples to feed the population. For about 1 billion people on this planet, debt has meant the reversal of promised economic development, and a steady slow slide back into desperate poverty.

But the crippling effects of this debt are not felt only by the poor. Environmental damage often results when developing nations are forced to meet their debt payments by increasing cash-crop exports. Soil is degraded through overuse or saturation with chemical fertilizers. Forests are destroyed by logging or "slash-and-burn" ranching and farming. Fish stocks are decimated by overfishing of rivers, lakes, and oceans. It is the world's largest debtors who can least afford to protect or steward their natural resources.

At the same time, when nations are devoting 30 to 80 percent of their GNP to debt, they can ill afford to pay high wages to their citizens or purchase products imported from the West. As a result, the debt crisis contributes to the migration of jobs and robs the First World of potential customers for its products.

Some highly indebted countries often turn to illegal drugs as a cash crop. In Bolivia, where half the income from legal exports must go to paying its debt, 40 percent of its workforce is supported directly or indirectly by the drug trade. International debt even affects those in the West when commercial banks claim huge tax deductions for losses resulting from unpaid debt--it is First World taxpayers who end up paying for these write-offs. Like most quiz shows, International Debt is a game with many more losers than winners.

Ditch the debt

The author of Sirach 29:2 urges his readers to "pay back your neighbor when a loan falls due" but also reminds them of a special duty to lend money to those in need. Like several other Old Testament passages (Lev. 25:36-38; Ezek. 18:7-8; Deut. 23:20, 24:10-13), Exodus 22:24-26 forbids charging interest on loans to the poor, instructing the Israelites that "if you lend money to one of your poor neighbors among my people, you shall not act like an extortioner toward him by demanding interest from him."

Likewise, the author of Leviticus commands that impoverished Israelites are not to be sold into slavery to pay off their debts (25:35), nor are they to lose their land permanently (25:39). Instead, on the feast of the Atonement of every 50th or Jubilee Year, all debts to fellow Israelites are to be canceled, every Hebrew slave set free, and all Jewish properties returned to its original owner. It was hoped the poor would never be absolutely crushed by their debts.

Although the New Testament doesn't contain any such explicit proscriptions against loaning at interest, Jesus does say to his disciples in Luke 6:34-35 that "if you lend money to those from whom you expect repayment, what credit is that to you? Even sinners lend to sinners and get back the same amount. But rather... lend expecting nothing back; then your reward will be great and you will be children of the Most High." So too in the parable of the Unforgiving Servant (Matt. 18:21-35), Jesus presents God as a king who forgives tremendous debts and calls us to show similar mercy to our debtors, that's one of the central lessons of the Lord's Prayer (Matt. 6:12), where we ask God to "forgive us our debts as we forgive our debtors."

Contemporary Catholic social teaching has three things to say about the mounting crisis of International Debt. First, in many countries the present level of debt represents an intolerable and unpayable burden, resting mainly on the backs of the poor. In At the Service of the Human Community: An Ethical Approach to the International Debt Question, the Vatican argues that "debt servicing cannot be met at the price of asphyxiation of a country's economy, and no government can morally demand of its people privations incompatible with human dignity."

As a result, John Paul II's 1994 apostolic letter Tertio millennia adveniente (As the Third Millennium Draws Near), asks that the year 2000 be celebrated as a Jubilee Year, and that the debts of the Third World be canceled or written down substantially.

Second, the church believes that Third World debt is a symptom and result of larger injustices in global financial systems. Pope Paul VI argues in Populorum progressio (On the Development of Peoples) that international financial structures unfairly benefit First World nations and must be restructured. Finally, critics have argued that both First World creditors and Third World borrowers share responsibility for this debt--both should be involved in finding a fair solution to this crisis.

In ancient Israel the Jubilee Year protected poor debtors from being sold into slavery. In the U.S., liberal bankruptcy laws offer similar protections to individual consumers and businesses. What the pope and many others are arguing is that there must be some way to offer the same sort of relief to those millions and millions of poor people in developing countries who can't turn to Wink Martindale for help.

RELATED ARTICLE: The arguments for debt forgiveness

* Debt contributes to poverty. The poorest, most heavily indebted countries spend more on debt service than on health, education, and nutrition. Mozambique spends twice as much on debt payments as on education, four times as much on debt service as health care.

* Bankrupt countries cannot get bankruptcy protection as can individuals, businesses, and local governments. There are at least 41 bankrupt countries, 33 in Africa, 4 in Latin America, with almost no ability to pay the loans back.

* Debt relief helps countries out of poverty and into the global economy. Debt relief frees up resources that can be invested in health and education, making people more productive, and paving the way for economic growth.

* The U.S. has forgiven debts before. The U.S. forgave Egypt $7.5 billion in military debts and Jordan $226 million after Desert Storm.

* Debt relief costs little. Debts owed by poor countries to the U.S. are worth only 7-10 cents on the dollar, not their full face value.

--Talking points on debt by the United States Catholic Conference

RELATED ARTICLE: Debt control

Looking for some help getting out of debt? See if your local library has one of these:

Surviving Debt' A Guide for Consumers (National Consumer Law Center), David Heitmiller's Getting A Life (Viking, 1997), or Olivia Mellan's Overcoming Overspending (Walker, 1995). You can also get in touch with the National Foundation for Consumer Credit (800-388-2227; www.nfcc.org) which can refer you to the nearly 3,300 cooperative extension offices around the country.

Wanting to learn more about International Debt? Be a part of the solution by contacting Jubilee 2000 USA at [e-mail] or the Jubilee Coalition at www.oneworld.orgl jubilee2000. You can also get information from Barbara Kohnen at the United States Catholic Conference's Department of Social Development and World Peace [phone]; or e-mail: [e-mail].

U.S. CATHOLIC congratulates arts and culture columnist Patrick McCormick on the publication of his new book, Character, Choices and Community: The Three Faces of Christian Ethics (Paulist Press), which he wrote in collaboration with Russell B. Connors, Jr.

By Patrick McCormick, an assistant professor of ethics at Gonzaga University in Spokane, Washington.