Paul L. Caron

Sunday, March 21, 2021

Skeel: God, Puerto Rico And Bankruptcy Law

Wall Street Journal op-ed:  God, Puerto Rico and Bankruptcy Law, by David Skeel (Pennsylvania):

I see restoring fiscal responsibility on the island as a deeply Christian activity.

On Monday Puerto Rico’s oversight board filed a proposal for restructuring the island’s $35 billion of debt and $50 billion of unfunded pension obligations. As chairman of the board, created by Congress in 2016 to help restore fiscal responsibility to the island, I’ve been immersed in the technical details from the beginning. This process wouldn’t make many Christians think of Christianity, but it should.

The Bible recognizes that debt can be beneficial but is dangerous if misused. In the ancient world, delinquent borrowers were often forced into slavery. The Old Testament curbed these risks by forbidding God’s people from charging interest on loans to one another and by barring creditors from taking a debtor’s grinding stone—that is, his livelihood—as collateral for a loan. It also provided relief from financial distress. Slave owners were required to release Jewish slaves and their debts after the debtor had served for seven years. Every 49 years brought an even more sweeping release, the Jubilee. In Leviticus 25, the Israelites are instructed to blow a trumpet and “proclaim liberty throughout all the land to all of its inhabitants,” which included the release of slaves and debt relief.

Although many Christians don’t view these Old Testament rules as binding, the general principles remain relevant. And they are echoed in Jesus’ teaching. In the Lord’s Prayer, Jesus taught his disciples to ask God to “forgive us our debts, as we forgive our debtors.” Several of his best-known parables also emphasize the importance of debt forgiveness. ...

Although the Bible calls for compassion for those in financial distress, it also makes clear people must fulfill their promises, including promises to repay borrowed money. “The wicked borrows but does not pay back,” according to one of the psalms. Only when someone truly can’t repay his debts—like the servants in Jesus’ parables—is the plea for a fresh start justified. To a remarkable extent, these principles are reflected in American bankruptcy law. ...

I’m often asked why I was willing to be reappointed to a second three-year term on the oversight board, given the significant time commitment and the fact that members aren’t paid. The decision was easy. It has been a tremendous privilege to try to make the lives of three million American citizens a little better after years of economic distress. And the effort to restructure the debt in a way that balances the importance of contractual promises with Puerto Rico’s desperate need for a fresh start may be the most Christian activity I’ve ever been involved in.

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