Like bookends, two debt crises stand at either end of the ten years I have just finished as Bishop of Worcester. There is an irony about that, given that while I was researching the topic of debt in my previous job it did not occur to me that I might be engaged in something so topical.

But so it was: I arrived in 1997 to find church people in general, and the Diocese of Worcester in particular, gearing up for a consciousness-raising exercise about the crisis of unrepayable debt facing the poorest nations of the world. The result of that effort, the Jubilee 2000 campaign, was a remarkable achievement. It was a simple concept bearing fruit through a brilliant publicity campaign, so that I could truthfully say to Clare Short, then the Secretary of State for International Development, that we had delivered a level of support for development aid that she could hardly have imagined possible. Gordon Brown, as Chancellor, stood behind the efforts she and her successors were then able to make to deliver debt relief — not as much as we had wanted, but significant nonetheless.

Where we were less successful was in getting across a systemic analysis of the nature of runaway debt, its roots in the creation of money by lending and borrowing, and the potential dangers for the world of both domestic and international debt. It is obvious that if you allow financial institutions to make huge profits by lending large multiples of the deposits they hold, you are allowing them to create money. But those who have sought to underline the dangers of a system that invites huge escalation in the supply of money tend to be regarded as antediluvian supporters of a return to the gold standard and mortgage queues.

The failure to get those connections understood became clear in the Northern Rock crisis. The pumping of virtually limitless sums of money into the certainly not unlimited supply of land and real property has become something that has a hold on us all: which government would get re-elected if it could not virtually guarantee a continuous upward trend in house prices?

This failure of understanding has led to the use of debt as an instrument not just for uncontrolled personal consumption but also for building hospitals, schools and even prisons. The disciplines of living within your means, of allowing public functions to be provided by democratically accountable institutions, and of not using tomorrow's resources today are forgotten as the young are trained in indebtedness as a condition of obtaining their tertiary education.

Most serious of all, we fail to notice where the resources are coming from: all the talk in the world about climate change and the depletion of the resources of the planet will be fruitless if we do not limit our appetite for eating up tomorrow's bread and burning tomorrow's oil today.

The Jubilee 2000 campaign gathered tens of thousands on the streets of Birmingham in 1998 to form a living chain around the G7 summit. As we bishops walked the length of that human chain it was evident that people were celebrating a liturgy of liberation from the shackles of debt, not just for the poorest but for us all. The people in the queues outside Northern Rock branches wore quite different expressions: these were people fearing for their life savings. In responding to that fear with a guarantee, the Government has again demonstrated that we will do anything about debt — including guaranteeing the assets of enormous institutional investors along with private individuals — except to re-examine the debt-based economy itself.

The communities of faith — Jewish, Christian and Islamic — have a proud history of criticising the institutions of credit and debt. Faith is after all about today's bread and giving thanks that there is enough for all our need, if not for all our greed, that we do not need to borrow our children's assets and leave them with the problem. Will nobody notice that for all the proclaimed solidity of a Northern Rock we are actually continuing to build our economy on sand?

The Right Rev Peter Selby was Bishop of Worcester from 1997- 2007