Years of Plenty, Years of Famine
- Mark Biller Sound Mind Investing
- 2006 26 Jul
Joseph has always been one of my favorite Bible characters. His roller-coaster ride from favorite son to slave to master of the house to prisoner to Viceroy of Egypt is both amazing and inspiring. The culmination of the story in Genesis 50:20 holds out hope to every believer going through difficult times: "You intended to harm me, but God intended it for good." What an inspiring example of God at work in the affairs of men to accomplish His ultimate purposes!
Lately I've been pondering the story of Joseph from a different perspective, specifically the lessons it holds from a financial standpoint. The turning point of Joseph's experience in Egypt occurs when he interprets a pair of dreams for Pharaoh. He realizes that Egypt will soon experience seven years of abundance, followed by seven years of famine. Joseph is put in charge of the preparations during the years of plenty, so that the people can survive the coming years of famine.
Please understand that what follows is not a prediction or prophecy. But as I've pondered this recently, I've wondered if America may be facing a similar "years of plenty, years of famine" scenario. If that's even remotely possible, we would be wise to consider the personal implications of Joseph's story and start making appropriate preparations now, during the years of plenty, for any difficult years ahead. Over the past 24 years, the U.S. has experienced a phenomenal run of economic prosperity. Since 1982, we've had only two short, mild recessions of nine months each. How unusual has this period been? Consider that from 1900-1982, there were 19 recessions, with a new one coming an average of just 3.5 years after each finished! In addition to strong economic growth, the huge increases in the financial markets and home values have further increased our wealth. Make no mistake, the recent economy and the degree of incredible prosperity it has produced have been quite unusual.
Ideally, we would have used a period of such financial abundance to prepare, personally and nationally, for future financial storms. Sadly, the opposite has largely been true. Consider a few telling statistics:
• In 1982, servicing our household debt took a little more than $1 of every $10 of after-tax income. By 2005, it had increased to almost $1 of every $7.
• Personal bankruptcies rocketed up 31.6% in 2005 as people raced to file before tougher laws took effect late in the year. In 2005 alone, 1 in 53 households filed for bankruptcy.
• The national savings rate fell to -0.5% last year, the first time Americans have spent more than their after-tax income since 1932-1933 when the Great Depression was raging. (The calculation of the national savings rate has some flaws, which we'll explore in next month. But it's noteworthy that the savings rate was 10.8% in 1984 as our years of plenty were starting, and is negative today.)
Things are no better at the national level. We've accumulated a staggering debt, and the coming shortfall in Social Security and Medicare is well documented. Yet despite our recent prosperity, no serious efforts are underway to fix these problems.
The Bible is clear in its warnings about debt, and looking at the financial statistics and trends, it's entirely too easy to see the potential for an economic upheaval sometime in the future. Thankfully, God has given us principles to show us how to prepare during the remaining years of plenty: diligently work to get debt-free, fund an emergency savings reserve, invest for the future, and diversify broadly.
Joseph wisely saved 20% of the harvested grain, and was able to save not only Egypt during the famine, but the surrounding nations as well. That should be our goal-to be faithful stewards now while times are good, in preparation for any future hard times. In being faithful this way, we may find ourselves being used, like Joseph, as instruments of God's deliverance in time of distress. (Naturally, this preparation for the future shouldn't keep us from being generous givers now.)
Don't lose sight of the major theme of Joseph's story: God is at work even in times of hardship. Perhaps it will only be through a financial "famine" that some people will ever become "hungry" for spiritual food that truly satisfies. If that ever occurs on a large scale, our actions now will largely determine if we'll be ready to help them.
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