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The Curse of Inflation: A Biblical View

by Tom Robinson Estimated reading time: 6 minutes. Posted on 9-Mar-2022
The ramp-up we’re seeing in inflation in the United States is the reaping of a bitter harvest sown by wrong policies. It’s important to understand.

Prices have been on the rise—whether gasoline, food, electricity, furniture, you name it. Inflation is hitting people’s wallets hard—especially in America, but in other countries as well.

The problem is actually worse than most realize. Real inflation is running much higher than the 7 percent reported in official U.S. government numbers, as calculation methods have changed. A more honest assessment at shadowstats.com reveals that if inflation were measured as it was in 1990 the rate would be 12 percent—or if figured as in 1980 the rate would be 15 percent.

Unemployment is also high. Government statistics put it at 3.4 percent in January, but it also has changed the calculation method for determining unemployment numbers. Going by more reasonable pre-1994 calculation, U.S. unemployment now shockingly stands at around 25 percent!

Another facet of the grim financial outlook is U.S. household debt, which for the first time passed $15 trillion in the third quarter of 2021. And in January 2022 U.S. national debt for the first time exceeded a mind-boggling $30 trillion as part of a dangerous money-creation experiment that is fueling the ramp-up in inflation.

Just what is going on? Where will it ultimately leave us?

The lure of Modern Monetary Theory

The Federal Reserve has gone into overdrive over the past decade in what amounts to creating more and more money out of thin air. We’re told not to worry about any repercussions of this massive money creation and the debt associated with it because of the new economic siren song of Modern Monetary Theory or MMT.

Writing in the American Enterprise Institute publication National Affairs, author Jonathan Hartley explains: “The defining feature of MMT—and what distinguishes it from more established, mainstream economic theories—is its insistence that, so long as a government’s debt is denominated in its own currency, there is no upper limit on the state’s monetary borrowing. In other words, public debt is irrelevant; a country’s central bank can always avoid default by printing more money. Such printing, MMT proponents further argue, can go on without any inflationary consequences” (“The Weakness of Modern Monetary Theory,” Fall 2020).

This especially appeals to those who want to fund an endless array of massively expensive government programs, but it gained wider acceptance as a means to buoy up the economy during Covid lockdowns. While MMT may be convenient, Hartley goes on to say, “MMT’s central claims regarding the harmlessness of deficits, debt, and mass currency production are not only flatly false, they are deeply dangerous” (emphasis added throughout).

He does note that the United States, due to the vastness and richness of its economy and the dollar serving as the world’s reserve currency, is able to borrow enormous sums. But this ultimately comes on the backs of everyone who holds dollars—in both America and around the world. Eventually investors, “no longer believing the government to be solvent, will refuse to buy bonds or lend to the government at manageable interest rates.” America is not there yet, but those calling for endless massive spending are driving the nation steadily to that point.

For years economists have warned that if the United States keeps ballooning up the money supply without commensurate economic growth and productivity, it is inevitable that other global economic powers such as the European Union or China will demand that the dollar be replaced as world reserve currency with the euro or Chinese yuan. This would lead to huge economic problems in America, including the hyperinflation nightmare.

The government is stealing from you

It was reported earlier this year that “U.S. companies are expecting to pay an average 3.4% raise to workers in 2022” (CNBC, Jan. 18, 2022). They’re forced to do so to retain workers, but this does not come close to keeping up with inflation. Likewise a Breitbart headline reads, “UK Wage Hikes Wiped Out to Zero by Soaring Inflation Rate” (Jan. 18, 2022).

Through policies that create inflation, governments are actually stealing from companies and individuals. How does this work? It’s really very simple. By artificially adding more and more money‚ the value of existing dollars is diminished. Therefore virtually everything you buy costs more—sometimes a lot more.

How bad is it? In 2020-2021, the U.S. money supply soared an astonishing 27 percent, the biggest jump in the nation’s history. This was far greater than in response to previous national crises such as the Great Depression (10 percent) and World War II (18 percent). Hundreds of thousands of businesses shut down and tens of millions of Americans were paid to stay home rather than work. The federal government sent “free money” checks to every American, including incarcerated felons. And now Americans are paying the price.

Among those hardest hit are the ones governments assure us they are dedicated to helping, namely the poor and the elderly. But since most of their meager income goes to such basics as food and utilities, inflation is especially devastating to their financial condition.

Besides the massive money creation that gives governments more wealth while diluting how much the money you have is worth, governments must keep interest rates low to finance that huge debt they’ve taken on. This keeps savers—especially those who are trying to preserve their income, such as those in or nearing retirement—from earning interest income and pushes many into gambling with their futures by seeking more dangerous investments just to maintain the same income (“How the Fed Is Driving Savers to Riskier Investments,” The Washington Post, July 1, 2020).

The truth is that the whole concept of fiat currency— money decreed into existence with no tangible basis—constitutes the biggest thieving scheme in history. Such currency manipulation contravenes God’s laws on maintaining honest weights and measures (see Deuteronomy 25:15; Proverbs 11:1; 16:11; 20:23).

God in the Bible repeatedly condemns stealing from others and mistreating the poor and needy (Exodus 20:15; Leviticus 19:11; Deuteronomy 24:14; Psalms 72:4; 82:4; Amos 8:4-6). And He warns against going into debt as a road to enslavement (Proverbs 22:7).

Former U.S. President Thomas Jefferson wrote to his friend John Taylor on May 28, 1816, that “spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.” Indeed, expanding government debt obligates future generations to repaying debt they never incurred or had any say in creating. Again, it’s pure theft.

Do what you can to prepare

Bible prophecy warns about coming economic upheaval and troubles increasing in the English-speaking nations and the ultimate collapse of the financial system the world over (see our free study guides The United States and Britain in Bible Prophecy and The Book of Revelation Unveiled).

Yet in some ways all will seem to be humming along—until calamity strikes (Matthew 24:38-43).

Do what you can to prepare —to be ready (verse 44). As Proverbs 22:3 and 27:12 tell us, “A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences” (New Living Translation). Of course, humanly we can only do so much. We need God to see us through. Jesus promised that if we seek first the Kingdom of God and God’s righteousness that our physical needs would be provided for—that we would not be destitute (Matthew 6:25-34; compare Psalms 37:25).

The sobering fact we all face is that a reckoning lies ahead. Let us all take God’s warnings seriously and do whatever we can to prepare. Above all, we must prepare spiritually (see Matthew 25:1-13), and God will see us through to the wonderful age beyond today when His laws—including His economic laws—will at last be followed the world over.

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