and (2) household emergencies such as for the family, and help the less fortunate.
leaky roofs and automobile breakdowns. Burkett stresses that Christians need to be ...Larry
Under such circumstances, families often content with a balanced material life that Burkett’s
resort to credit cards as a payment device. God has provided and not indulge in over- personal
The lack of prospective budgeting would consumptive lifestyles leading toward
repeat itself annually resulting in ever financial bondage and constrained king- finance books
deeper indebtedness. We discovered that dom impact. Contentment, however, does are useful,
extensive credit card debt (in the thou- not mean a lack of financial planning. indeed
sands of dollars) among some Christian Burkett believes that rigorous financial
families was normal. Unpaid balances planning is absolutely essential if Chris- essential, for
were compounding at annual rates of tians are to be good stewards of the many Christian
interest in the 14–18 percent range.1 Some financial resources entrusted to them. and non-
families with healthy income flows were Healthy family financial management
financially vulnerable.2 We were surprised leads toward more giving in the church,
at the lack of planning and forward healthier intra-family behavior, and a families strug-
thinking. Some families seemed to be stronger basis for families and churches gling with
living week-to-week. Longer range issues to help those in need.
like college planning, retirement, and
After developing a foundation of
development of an emergency fund often proper values and attitudes, Burkett problems.
were not addressed. stresses several major themes: (1) avoid the
mentality of living only in the short-term;
Larry Burkett’s Personal Finance always plan ahead and anticipate upcom-
Framework ing financial issues; (2) live within your
It is to these problems that the personal means. Be disciplined in your spending
finance books of Larry Burkett, Ron Blue and rigorous in your planning in order to
and other Christian financial planners keep spending below income; (3) avoid the
have been directed. It is our general consumer debt trap, especially credit card
conclusion that Larry Burkett’s personal debt. Avoid going into debt to finance
finance books are useful, indeed essential, consumer items (food, clothing, appli-
for many Christian and non-Christian ances, automobiles) and make it a top
families struggling with financial prob- priority to reduce mortgage debt.3 Burkett
lems. Even though we do not agree with believes that each family should develop a
every element of Burkett’s personal clear, realistic, and rigorous budget that
financial system, we would not hesitate to incorporates these themes and reflects
recommend his books to others; our Christian priorities and values. Rejecting a
families have benefitted greatly from budgeting approach to family finances
them. could be perceived by some Christians as
Burkett’s family financial planning depending more on God and rejecting
system begins with a grounding in biblical worldly materialism. Burkett believes that
values and attitudes toward finances. most Christian families that spiritualize
Burkett (1985, pp. 13–66) describes the the material realm in this way actually
attitudes of contentment, planning, and move toward financial bondage. Failure to
servanthood that should permeate the budget, rather than a sign of Christian
Christian’s approach to money. He be- spirituality, leaves many Christian families
lieves that a desire to increase one’s wealth with little or even negative kingdom
is often misperceived as worldliness. The impact in regard to finances.
real issue, however, is not the accumula- In many respects, Ron Blue’s (1991)
tion of wealth per se but the underlying financial planning methods and ideas are
values and motivations for wealth accu- similar to Larry Burkett’s. While Blue
mulation. Many Christians should be touches upon some basic economic issues,
motivated to accumulate wealth to sup- it is almost exclusively from the perspec-
port the Church and its missions, provide tive of family financial planning.4 For
example, he discusses inflation as an The three themes imply a fourth and
...[The] important ingredient to consider when capstone theme of Burkett’s economic
capstone theme thinking about retirement (Blue 1991, writings: an economic catastrophe is
pp. 45–54). In the few cases where Blue imminent. Burkett likens the catastrophe
of Burkett’s ventures into broader economic themes, he to an earthquake that will devastate the
economic is quite restrained. Burkett also ventures U.S. economy. The coming collapse will be
writings: an into basic issues of inflation and unem- of the magnitude of the Great Depression.
ployment in the context of family financial Burkett sees a number of tremors in the
economic planning. economy that herald the coming economic
catastrophe is earthquake (e.g., the S&L crisis, the cost of
imminent. Larry Burkett’s Economic Analysis AIDS, and the under-capitalization of
In some of his writings, however, FDIC, the insurance industry and social
Burkett ventures far away from family security).
finances and tackles the realm of general The economic earthquake scenario
economic analysis (1991, 1993). These follows a certain logic. Secularization,
writings feature a number of inter-con- government intrusion, and the entitlement
nected themes. The first is the increased mentality lead to ever-growing private
secularization of American society. Both and public debt. Greater societal indebted-
Christians and non-Christians are ignoring ness is a symptom of the underlying
or rejecting biblical principles in many rejection of biblical values in the material
facets of their lives. In the family financial realm. Eventually greater debt, especially
realm, rejection of biblical values leads to public debt, must give way to depression
materialistic lifestyles financed by over- or hyperinflation followed by economic
indebtedness, dishonesty in business collapse (1991, pp. 150–54). Although
dealings, token giving, an entitlement Burkett identifies major changes in the
mentality, and a general indifference political realm that could forestall the
toward the poor (1991, pp. 206–213, 222; economic calamity, he believes the col-
1985, pp. 14, 212–214). In the economic lapse is highly likely. Although he states
realm, secularism leads to materially that it is impossible to predict when the
dependent families and over-indebted collapse will occur, he believes it will come
government. These in turn lay a founda- “in the midst of what appears to be eco-
tion for detrimental cycles of inflation and nomic prosperity” (1991, p. 222). Based
recession (1991, pp. 82–182). upon the Kondratieff cycle, Burkett
A second theme of Burkett’s economic suggests the depression might occur
writings is the increased presence of somewhere around the year 2000.
government in U.S. society. He cites Mixed within the apocalyptic economic
numerous examples of government analysis are some doubtful interpretations
domination of business, banking, com- of economic history and some factual
merce, and the macroeconomy (1991, errors. For example, Burkett (1991, pp. 19–
pp. 27–39, 128–143; 1993). 29) describes how the stock market crash
The first and second themes are closely of 1929 precipitated the Great Depression.
connected to a third: American society is If the stock market crash of 1929 was
increasingly driven by an entitlement a major cause of the depression, why did
mentality (1991, pp. 97–100, 145, 152, 222; the stock market crash of 1987 (of the same
1993, pp. 183–189, 240). American citizens relative magnitude as the 1929 crash) not
desire more from government, but they precipitate a great depression or even a
don’t want to pay for it (1993, p. 203). The recession? Sorting out the causes of the
excess demand for government provisions Great Depression is a lively topic in the
leads to an ever-growing national debt, an economics profession, but Burkett glosses
increasingly intrusive government, and over much that is important in under-
decreased initiative for healthy family standing that economic catastrophe.
14 SPRING 1997
Burkett’s analysis of the rise of this instance reflects the kind of problem-
Keynesian economics—a philosophy he atic historical economics found in his ...we find
holds partly responsible for government writings. [Burkett’s]
‘domination’ of the economy today—is
also problematic. For example, he states:
How Should Christian Economists
Franklin Roosevelt was...educated Respond? analysis to be
...at Harvard, where he was It is difficult to respond to the economic superficial,
exposed to the philosophies of writings of Larry Burkett; we find impor-
John Maynard Keynes of England. tant points of agreement but also serious
Keynes, an avowed socialist, had areas of disagreement. We agree with apocalyptic,
long advocated the use of govern- Burkett’s concerns about excessive govern- and fraught
ment control over banking and ment intrusion and the entitlement mental- with factual
business to ensure prosperity for ity and we believe he should be com-
all. The philosophy was not new. mended for his insistence that the secular- errors.
Karl Marx had advocated essen- ization of society manifests itself in the
tially the same doctrine...(1991, realm of economics and family finances.
p. 27). Nevertheless, we find his economic
The General Theory of Employment, Interest analysis to be superficial, overly apocalyp-
and Money, published in 1936, could not tic, and fraught with factual errors. There
have influenced Roosevelt decades are obviously numerous alternatives to the
earlier at Harvard. Indeed, Keynes met collapse scenarios that he paints.6 While
with Roosevelt in the 1930s in an effort recessions are highly probable over a ten
to convince the President that govern- year period (based on past experience),
ment deficit spending could revive the predicting economic calamities of Great
U.S. economy. Roosevelt thought that Depression magnitude based upon the
Keynes’ ideas were fanciful.5 Kondratieff cycle is highly speculative.
Burkett’s linkage of Keynes and Marx Other (non-Kondratieff) forms of
is equally problematic. As Gwartney and economic analysis in Burkett’s writings
Stroup (1990, p. 228) put it: have a certain logic to them, but they too
Some critics of Keynes thought his are problematic. These other forms of
ideas were a threat to the market economic analysis center upon escalating
economy. Personally, Keynes national debt. Ever-growing national debt
believed his ideas strengthened must lead to monetization of the debt or a
the case for the private sector by growing threat of government default of
proposing a cure for its most its debt obligations. By printing money to
serious shortcoming: the reces- meet its debt obligations, inflation and
sion. He praised the virtue of nominal interest rates would rise. Carried
profits. “The engine which drives out excessively (because of excessive debt),
enterprise,” Keynes wrote, “is not monetization could lead to hyperinflation
thrift but profit.” He was unim- and eventually economic collapse. If the
pressed with Marxian ideas, government refuses to monetize the debt,
which he found to be “illogical ever-increasing national borrowing and
and so dull.” the threat of default would push interest
Nobody would claim that Gwartney and rates up, leading toward economic col-
Stroup are Keynesians. We are not trying lapse. Either way, escalating national debt
to defend Keynesian economics, which leads to economic collapse.
has some flaws that are well recognized Burkett’s near-term economic collapse
in the economics profession. The prob- scenarios are not credible (nor were they
lem here is that Burkett’s treatment of credible in the early 1990s) because they
Keynes and Roosevelt is not accurate; are not reflected in long term Treasury bill
the facts are wrong. Burkett’s analysis in rates. If either of Burkett’s collapse sce-
narios were imminent, holders of T-bills
would be unloading them, initiating rising distinguish Burkett’s concerns and values
...surely the interest rates today. Even if somehow the (where we have common ground) and his
ways in which government tried to conceal its monetiza- apocalyptic and erroneous economic
tion of debt or its borrowings, such activity analysis (where we have little common
would still percolate through the financial ground). Third, Burkett has some valuable
allocate their markets to be dissected by tens of thou- things for Christians to hear in the realm of
financial sands of analysts. We see no evidence of family finances. It would be unfortunate if
resources is a impending government default or hyper- we dismissed Burkett for his problematic
inflation in the financial markets today. economics, only to miss the important and
significant part Even within Burkett’s own writings valuable influence that he has in the realm
of economics. there are irreconcilable contradictions that of family financial management.
demonstrate the overly apocalyptic nature When we first became interested in
of his economic analysis. For example, teaching personal financial management in
Burkett (1991) warns of government our church, we did not view the subject as
default and collapse by the year 2000, but “economics.” Yet surely the ways in which
then he classifies government-backed families allocate their financial resources is
securities as one of the best forms of a significant part of economics. By what
investment (1992, p. 89). He also states: criteria are inefficiency, slow economic
Among those I have counseled who growth, unemployment, inflation, and
were more than 50 years of age, pollution economic problems—but over-
government-backed securities indebted, financially vulnerable families
dominated their best investment list. not an economic problem? Consider the
This does not imply that CDs,T-bills, question from a positive economic view-
bonds and the like are the best point. A society that is made up of a
performers. As mentioned earlier, relatively large proportion of financially
they are usually selected for their over-extended families might be expected
lack of risk, not their return (1992, to have longer and deeper recessions than
p. 90). a society with a small proportion of such
They can be selected for “their lack of risk” families.8 Financially vulnerable families
only if the collapse scenarios that Burkett may be more prone to divorce. Their
paints are not credible. behavior affects their willingness and
ability to give, enjoy life, assist children
Can Larry Burkett Influence Us? during the college years, and retire with-
It is important to recognize that out assistance from others. These in turn
Burkett’s economic analysis creates have a significant influence on our
obstacles for Christian economists and we economy and society, including the
will be prone to dismiss him. This would church. Surely a society with 30 million
be unfortunate. First, Burkett is influenc- families practicing a Burkett/Blue form of
ing the economic thought of thousands of family financial management is going to
Christians. We need to be aware of his be a different economy and society than
economic thought and offer other perspec- one where only 5 million families do so.
tives that balance his apocalyptic analysis.7 The effects of family financial practices on
Second, there are areas of concern where families and the economy are matters for
many Christian economists would tend to scientific investigation by economists.
find common ground with Burkett. For There are significant positive economic
example, Burkett’s concern about govern- questions to be investigated within the
ment intrusion is consistent with a public realm of family financial management.
choice perspective. We can indicate to We view family financial management
fellow Christians where we think the as an economic subject with the potential
economics profession (or subsets of it) for synthesizing Richardson’s (1994) view
tend to agree with him. It is important to that Christian economists should be good
16 SPRING 1997
economists and the desire of some of our 3 Some Christian financial teachers
colleagues to do “Christian economics.” maintain on the basis of Romans 13:8
A good economist will want answers to that the Bible prohibits borrowing, e.g.
questions that stem from treating family Institute in Basic Life Principles (1983),
financial management as an economic pp. 75–87. Although Burkett is negative
topic (Is long term credit card debt ratio- and cautious about debt, he does not
nal? Are recessions deeper and longer in take the position that the Bible prohibits
societies with certain family financial it: “There is not a verse directing God’s
management norms? How do family people not to borrow money (not even
financial norms affect economic growth Romans 13:8)” (1985, p. 107).
or the role of government in society?). 4 For example, Blue (1991, pp. 45–54)
Development of a “Christian economics” discusses inflation as an important
might start with the family as the funda- ingredient to consider when thinking
mental unit of analysis (as opposed to the about retirement.
individual or society). While Gary Becker 5 The video series Economics USA
and others have already launched “family (Annenberg/CPB Collection 1986)
economics,” Christian economists can states:
make unique contributions to the field. Popular history has it wrong,
We wonder what our economics textbooks Franklin Delano Roosevelt did
would look like if the family, along with not come to the White House
society and the individual, was treated as convinced of the need for a
a fundamental unit of analysis. Consider Keynesian program of public
the gains to society and the church from spending to revive the shattered
Christian families practicing healthy economy. In fact, he considered
financial management. Instead of needing deficit spending a desperate and
assistance, families would be able to assist. dangerous measure. FDR had
Increased giving in our churches, growing spent much of the 1932 cam-
out of a base of family financial health, paign declaring his faith in a
would surely transform churches and balanced budget and blasting
society. Too much of our economics Hoover as a big spender.
focuses on the individual and society and 6 This is not to say that some form of
whether to have “more” or “less” govern- economic or societal collapse could
ment. Scientific and normative economics never happen in the United States.
would benefit greatly from family eco- History shows that every civilization
nomics and the perspectives of Christian comes to an end. Blue (1991, p. 15)
economists. For all of the problematic quotes Alexander Tyler’s conclusions
economics in Larry Burkett‘s writings, he regarding the decline of the Athenian
does have his finger pointed at a subject republic:
we should take seriously. A democracy cannot exist as a
permanent form of government.
ENDNOTES It can only exist until the voters
discover that they can vote
1 See Brito and Hartley (1995) for a model themselves a largess from the
explaining why credit card loans can be [public] treasury. From that
attractive relative to bank loans. moment on, the majority will
2 It was during the time of our initial always vote for the candidates
seminars that then-Boston Red Sox promising the most benefits from
baseball player Jack Clark filed for the public treasury, with the
bankruptcy in spite of his $2 million result that a democracy always
annual salary. collapses over loose fiscal policy
and is always followed by a
The average age of the world’s REFERENCES
greatest civilizations has been
200 years. These nations have Annenberg/CPB Collection. “John
progressed through this se- Maynard Keynes.” Economics USA,
quence: from bondage to spiritual 1986.
faith; from spiritual faith to great Blue, Ron. Master Your Money. Nashville:
courage; from great courage to Thomas Nelson Publishers, 1991,
abundance; from abundance to revised edition.
selfishness; from selfishness to Brito, D.L. and P.R. Hartley. “Consumer
complacency; from complacency to Rationality and Credit Cards.” Journal
apathy; from apathy to dependency; of Political Economy, 1995, Vol. 103,
from dependency back again into No. 2, pp. 400–433.
bondage. Burkett, L. Whatever Happened to the
Blue directs the theme of Tyler’s American Dream? Chicago: Moody
statement to the United States. Al- Press, 1993.
though Blue (1991, p. 16) believes that a _________. The Coming Economic Earth-
societal collapse could come to the U.S., quake. Chicago: Moody Press, 1991.
he draws a longer-term, non-apocalyp- _________. Debt-Free Living. Chicago:
tic picture. Indeed, Blue endorses the Moody Press, 1989.
book cited in the following note that _________. Using Your Money Wisely.
describes the U.S. economy as safe and Chicago: Moody Press, 1985.
secure. Gwartney, J.D. and R.L. Stroup. Economics:
7 A book that balances Larry Burkett’s Private and Public Choice. New York:
apocalyptic economics is Bruce Harcourt Brace Jovanovich, 1990, 5th
Howard’s Safe and Sound: Why You Can edition.
Stand Secure on the Future of the U.S. Howard, B. Safe and Sound: Why You Can
Economy. Wheaton, IL: Tyndale House Stand Secure on the Future of the U.S.
Publishers, Inc. 1996. Economy. Wheaton, IL: Tyndale House
8 See King (1994), whose cross-section Publishers, Inc., 1996.
analysis is prefaced by the view that “In Institute in Basic Life Principles. Men’s
the early 1990s the most severe reces- Manual, Vol. 2. Oak Brook, IL: Institute
sions occurred in those countries which in Basic Life Principles, Inc., 1983.
had experienced the largest increase in Keynes, J.M. The General Theory of Employ-
private debt burdens.” ment, Interest, and Money. New York:
Harcourt Brace Jovanovich, 1936.
King, M. “Debt Deflation: Theory and
Evidence.” Abstract of his European
Economic Review Presidential Address
in Economics Alert, No. 2, June 3, 1994,
Amsterdam: North-Holland, pp. 1, 8.
Richardson, J.D. “What Should Christian
Economists Do? ‘Economics!’” ACE
Bulletin, 1994, No. 23 (spring), pp. 16–
18 SPRING 1997