From September of 1774 through March of 1789 (when Congress as we know it first started up), the States went through three Congresses and various interim forms of federal government, generally with plenty of power to incur debts and wage war but not a whole lot else; they could print money (and did, in profusion) but had nothing to with which to back it. These bad habits were passed on to subsequent Congresses -- despite an honest effort by the Framers to apply some limits.RTWT.
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One of the few things I remember about grade school history was the paper money and the phrase "Not worth a continental." And I knew at ten years old that was not a good way to pay for things.
Well done on X's part! Happy 4th!
I have fixed the typos in the original -- "wiht" for "with" and "pint" for "print."
The advantage of money actually backed by something (ie the gold standard) instead of a fiat currency as we have now, is that governments can't just print money. This means that if they want to pay for something (an expensive war, for example) they have to convince the people that it is worthwhile enough to justify higher taxes. As it is now, they just print more, pay for the war, and we have inflation or debt.
^^ THIS ^^
I used to be all in favor of fiat currency -- it does have major advantages over a fully backed currency. Theoretically. (An important theoretically, especially in a growing economy -- a full reserve gold standard can really tie you up, and a fractional reserve one isn't much better in terms of flexibility to deal with change.)
The problem is that we monkeys can't just leave things alone, and keep trying to tweak the system out of the best of intentions.
It's bad enough when you're devaluating your currency by repegging the price of gold, but when all you have to do is print more (or, Hell, these days, just create "virtual" dollars electronically for bank-to-bank transactions that don't require physical currency transfers).
It's not that the gold standard is good, per se, so much as that we are really, really, bad at handling floating currencies.
We, as a species, have demonstrated time and time again that we cannot be trusted with the flexibility of a fiat currency system, because we invariably screw it up in rather short order.
Might as well have the morbidly obese five year old "just exercise self control" while leaving him alone all day with the pantry full of Twinkies.
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