7 fat years and 7 lean

October 21st, 2008 by admin | Filed under Daily News, Debt, Global Credit Crisis, Money Management, Recession.

During these most extraordinarily difficult of times, more and more people are turning to their local churches, synagogues and mosques for help and advice in getting through the problems that we all face to some degree. Religious institutions from all faiths are reporting an upsurge in the number of people asking for help and guidance with financial issues. So what does the bible tell us about the current situation?

We are told that following 7 fat years, there will be 7 lean, referring to the cyclical nature of economics and prosperity…even in biblical times. The advice was to store up grain from the fat years to feed cattle during the lean so that, over the entire economic cycle, the biblical farmers wouldn’t suffer too much. This sounds like very sensible advice to me. So have we learned from 2000 years of boom and bust? Eh….no.

Unfortunately, our own government must have missed school the day that old currently apt piece of advice was talked about in class. They totally forgot to store up enough grain during the fat years to get us through the lean ones. What did they do instead? They spent it. The golden rule of borrowing no more than 40% of National Income now lies in ruins as Ernst and Young expect this figure to rise to near over 90% in 2009/10, saddling us all with more and more debt at the time that tax revenues are falling and disposable income is being pressured from all sides.

The upshot is that the rules to protect during a slowdown are basically thrown out the window as soon as the slow down arrives. Now, it looks like we will have a sustained lean period…but then the Old Testament was pretty heavy on punishment. It’s time to pay the piper for the good times.