Debt, Finance, and Catholics

Debt and deficits seem to be on everyone’s minds these days. Whether it be worries about the American government’s fiscal woes, Europe’s fragile banking system, or the debt-as-a-way-of-life culture that disfigures so many lives, many people are seeking guidance about how to extradite ourselves from this mess with our souls intact.

In this regard, Catholics instinctively turn to Catholic social teaching for direction. Unfortunately, modern Catholic social encyclicals have relatively little to say about financial questions. Even the 2004 Compendium of Catholic Social Doctrine confines itself to very broad statements about finance and foreign debt, and it never really addresses the moral dimension of private and public debt.

This absence of sustained contemporary Catholic reflection on financial questions is puzzling. Because once we get past the Dark Ages propaganda and Black Legend mythology that distorts so many people’s vision of the Middle Ages and Catholicism more generally, we discover most of the practices of finance and banking took form in a medieval Christian world — one shaped and nourished by the Catholic Church.

Indeed, for many centuries, Catholic bishops and theologians invested considerable energy in understanding the world of money because of the usury question. Catholic thinkers were consequently among the first to identify money’s primary functions, illustrate how money in the conditions of economic freedom could assume the form of capital, demonstrate the moral legitimacy of charging interest on money-as-capital, and assess the moral status of different debts in different contexts.

Here it’s worth noting that early-modern Catholic theologians assailed governments who tried to escape their debts by measures such as inflating the currency or borrowing more money to pay for interest payments on existing public debt, or who spent large portions of the taxes they raised on servicing debt or on activities that were either morally evil or simply did not fall within the core functions of constitutionally limited governments.

Sound familiar?

Today one looks in vain for Catholic thinkers studying our debt and deficit problems from standpoints equally well-informed by economics and sound Catholic moral reflection. We don’t, for instance, hear many Catholic voices speaking publically about the moral virtues essential for the management of finances such as prudent risk-taking, thrift, promise-keeping, and assuming responsibility for our debts — private or public.

Instead, one finds broad admonitions such as “put the interests of the poor first” in an age of budget-cutting. The desire to watch out for the poor’s well being in an environment of fiscal restraint is laudable. But that’s not a reason to remain silent about the often morally-questionable choices and policies that helped create our personal and public debt dilemmas in the first place.


One Catholic who has proved willing to engage these issues is none other than Pope Benedict XVI. In his 2010 interview book Light of the World, Benedict pointed to a deeper moral disorder associated with the running-up of high levels of private and public debt. The willingness on the part of many people and governments to do so means, Benedict wrote, “we are living at the expense of future generations.”

In other words, someone has to pay for all this debt. And clearly many Western Europeans and Americans seem quite happy for their children to pick up the bill. That’s a rather flagrant violation of intergenerational solidarity.

But Benedict then sharpened the argument. This willingness on the part of governments, communities, and individuals to live off debt means that people are “living in untruth.” “We live,” Benedict stated, “on the basis of appearances, and the huge debts are meanwhile treated as something that we are simply entitled to.”

In fact, it’s possible to go further and argue such attitudes reflect a mindset of practical atheism: living and acting as if God does not exist, as if the only life is this life, as if the future does not matter. Only people who have no hope — no hope in God, no hope in redemption, no hope for the future — will think and act this way.

The economist John Maynard Keynes once famously wrote, “In the long run, we are all dead.” To be fair to Keynes, he was making a specific point about monetary theory. But his words are evocative of a mindset that should trouble Catholics and other Christians.

For if we choose to live our lives according to a perspective dominated by immediate gratification or pursue economic policies forever focused on the short term (which is, more or less, Keynesianism’s Achilles’ heel), then living off debt is entirely rational. But what does that say about our priorities and conception of human flourishing?

Taking on debt is not in itself intrinsically evil. In many circumstances, it’s an entirely reasonable decision. Nevertheless, a situation of inexorably increasing debt and a failure to confront its moral and economic causes can slowly corrode our personal sense of responsibility for our freely undertaken obligations and severely tempt us to live in a fantasy world of moral and fiscal unreality.

Such attitudes don’t just weaken economies. The damage to our personal moral well being, not to mention entire societies’ moral ecology, is immeasurable.

Samuel Gregg


Samuel Gregg is Research Director at the Acton Institute. He has authored many books including, most recently, For God and Profit: How Banking and Finance Can Serve the Common Good (2016).

  • Jim

    “Some men wrest a living from nature. This is called work. Some men wrest a living from those who wrest a living from nature. This is called trade. Some men wrest a living from those who wrest a living from those who wrest a living from nature. This is called finance.”
    ~ Fr. Vincent McNabb

    Money has evolved from a medium of exchange to a means of wealth in and of itself. The world’s financial problems will not be solved until the monopoly of the international private banking cartel’s monopoly on issuing debt backed money is taken away from the central banks and nations start issuing their own debt free credit.

    For a free education check out;

  • Jim

    Pope John Paul II has denounced the money dictatorship many times and advocated reform of the financial and economic systems realizing that the economic system must be put at the service of man.

    His 1991 encyclical Centesimus Annus, discusses the division of labor, property, prices, profits, debate, development, sound money, trade, the environment, and a host of other issues.

    Some other quotes:

    “One must denounce the existence of economic, financial and social mechanisms which, although they are manipulated by people, often function almost automatically, thus accentuating the situation of wealth for some and poverty for the rest.” (John Paul II, Sollicitudo Rei Socialis, n. 16.)

    “I appeal to those in positions of responsibility, and to all involved, to work together to find appropriate solutions to the problems at hand, including a restructuring of the economy, so that human needs be put before mere financial gain.” (John Paul II in Newfoundland, Sept. 12, 1984.)

    “An essential condition is to provide the economy with a human meaning and logic. It is necessary to free the various fields of existence from the dominion of subjugating economism.

    Economic requirements must be put in their right place and a multiform social fabric must be created, which will prevent standardization.

    No one is dispensed from collaborating in this task… Christians, wherever you are, assume your share of responsibility in this immense effort for the human restructuring of the city. Faith makes it a duty for you.” (John Paul II to the workers of Sao Paulo, Brazil, June 3, 1980.)

    Good programs on the fallacy of finance

    Quants: The Alchemists of Wall Street


    PBS Frontline: The Warning

  • Carl

    Wresting a living: Fr. Vincent McNabb’s quote defines capitalism well. And I mean that in a good way.

    But today too many are wresting a living arresting the living of others under the guise of a utopian planned society. This being accomplished primarily by socialistic governments who first created and now manage the international private banking cartel.

  • Gabriel Austin

    One of the best discussions of the money question and how we got here is Christopher Hollis’ TWO NATIONS. He begins with Henry VIII and from there to the fraudulent Fraud Act of 1688 which deprived most Englishmen of their property by the skillful device of demanding to see leases, which until then non-existent. This reinforced the growth of the Whig money power. The which in turn was eclipsed by the growth of banking and what Hollis calls double money – the issuance of loans that could not be covered by the bank’s assets. This led eventually to “banks too big to be allowed to fail”.
    The Church’s condemnation of usury seems commonsensical in an age of 18% [and higher] interest rates. The whole system is dishonest; and, further, injurious to the poor [of all nations].
    There is the tale of the farmer who kept his cash hidden at home. His grandson mocked him for this. Thinking he must keep up with the times, the farmer put his money in a bank. He enjoyed being able to write checks. One day his grandson came to him to say that his account was empty. To which the grandfather “You need money? I’ll write you a check”.
    Is this not what the Federal Reserve is doing?

  • richard

    Thank you for this very informative posting.

  • Kenny

    It is truly amazing just how naïve and clueless many in our Catholic community are as to the harmful effect of our government’s reckless spending. The irresponsible spending causes higher unemployment, inflation, interest rates and gas prices. Guess who is hurt the most by these consequences? The poor. Yet, there are many who continue to cry for more and more spending.

  • Susan

    It is telling that Keynes, biographies up till the 50’s notwithstanding, was actually a homosexual. Which puts a great new insight on his quote, “In the long run, we’re all dead”. He, and other sterile fellow travelers of the 20th century (including the contraceptors and aborters), indeed would have no posterity to actually consider.

    Read “Degenerate Moderns” by E. Michael Jones for more on this destructively influential man and similar others.

  • DAN

    @ Samuel Gregg

    Are you including Thomas Woods in your list of Catholic thinkers “studying our debt and deficit problems from standpoints equally well-informed by economics and sound Catholic moral reflection”?

    If you DO include him in that category, why didn’t you mention him?