History: It's Been Tried Before

Here's a few words from an old book titled Fiat Money Inflation In France. It's on France's financial troubles around the time of the French Revolution. The author is Andrew Dickson White, and you can find a PDF copy here, or just google it, there are several resources that have it. Anyway, it mirrors our time; here's a quote from the beginning:

Early in the year 1789 the French nation found itself in deep financial embarrassment: there was a heavy debt and a serious deficit.

The vast reforms of that period ... were a temporary evil financially. There was a general want of confidence in business circles; capital had shown its proverbial timidity by retiring out of sight as far as possible; throughout the land was stagnation.

Statesmanlike measures, careful watching and wise management would, doubtless, have ere long led to a return of confidence, a reappearance of money and a resumption of business; but these involved patience and self-denial, and, thus far in human history, these are the rarest products of political wisdom. Few nations have ever been able to exercise these virtues ...

There was a general search for some short road to prosperity: ere long the idea was set afloat that the great want of the country was more of the circulation medium ...

France at that time was not using fiat money. For us here in the U.S. we are already using "inconvertible paper money made legal tender by a government decree." But the idea is still very similar to what happened in France; those in the government wanted an injection of money to stimulate the economy, not "patience and self-denial." Or, in other words, Congress wants to continue to spend, spend, spend, and have the taxpayers pay the bill.

I will write more about White's book in later posts, along with some thoughts on inflation. Comments, suggestions, and questions can be directed to test.veeschay@gmail.com