Are גמ"ח's a bad thing?
Sounds ridiculous at first, what could be bad about providing interest free loans to people who need them? However, in this past weeks Mishpacha (Hebrew) the editor printed a letter in his weekly column which makes exactly this claim.
The main point of the letter is that גמ"ח's allow people to borrow money that they can never pay back. Someone who has a hard time getting through the month has very little chance of paying back a $50,000 loan that he took to marry off his children. The existence of גמ"ח's greatly increases the societal pressure to provide money to children without giving any thought to how the money will be paid back. According to the letter most people in the Charedi world are in debt and spend a lot of time running from גמ"ח to גמ"ח to pay back loans. גמ"ח's promote irresponsible financial behavior and let people drown themselves in debt.
I agree with the letter writer to a point. גמ"ח's are definitely enablers for risky financial behavior just like zero dollar mortgages were in the US. As a parent I know it is very difficult to say no to a child or not provide them what they need. If $50,000 is the going price to marry off your daughter it is very difficult to say no and unfortunately in today's Charedi society if you say no to the money your daughter will have a hard time getting married.
The bottom line is that the Charedi lifestyle is simply unsustainable financially. Sooner or later the bubble will burst.
In truth, I don't know what the answer is. In today's world (both in the US and in Israel) even if you have a good job it is very difficult to support a large family. Salaries are simply not made to support 6+ kids. Therefore telling people to work is not necessarily going to solve the problem. Large families and the modern finacial world just don't go together.