Not Worth a Continental
The saying: “ Not Worth a Continental ”has its roots at the start of this great nation.
Wars are rarely funded out of the existing treasury, nor are they financed from excessive taxes.
The massive amounts needed would curb the enthusiasm of even the most ardent supporters.
The Revolutionary War was no different.
At the beginning of the war in 1775 the total money supply was around $12 million.
Over the next several years the Continental Congress issued a total of $425 million more
That is an increase of the money supply of over 3500%. The states also increased their money supply by 5000%.
In 1775 paper Continentals were traded for $1 in gold; however by 1779 they were worth less than a penny. For example, shoes sold for $5,000 a pair. A suit cost a million continental dollars!
Arguably this is one of the rare times that debasing the money supply to finance a war was the right thing to do. The birth of a powerful and prosperous nation was the result.
Almost all of the other
fiat currency failures
have had disastrous financial results for the populous afterwards—many times leading to a loss of liberty, and to eventual tyranny.
The Power of Freedom
Not worth a Continental
It is worth noting that the United States was setup uniquely so that people could prosper in a free enterprise economy.
As an interesting side note, this powerful system provided the opportunity for people to recover from their huge financial losses caused by the
fiat money financing
of the Revolutionary.
To understand why this occurred, let’s review the second paragraph of the Declaration of Independence. It reads:
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their powers from the consent of the governed…
This document, this philosophy; whatever you want to call it, provided the opportunity for ordinary men and women, no matter what walk of life (and eventually race, creed or color) to succeed, or to fail.
The founders of the nation were against a strong centralized government that believes in a collective mentality where the society eventually degrades to a least common denominator of mediocrity and poverty—except for the elite.
Instead it provided a republic form of government where the governed are free and more important than the governing body.
The engine of this great nation is the free enterprise system. It is personal responsibility and initiative (instead of a collective mentality) that has been the fuel that creates the core strength of the greatest nation of the modern world.
The results of this freedom were stunning. The country expanded and prospered along with its citizens far past what the founders had expected.
Remember that this was before all the wars, public works, social programs that have weighed us down increasingly through 235 years of buildup.
The Erosion of Free Enterprise
Not worth a Continental
It is not that public works and social programs don’t have their place. They do. But there is a huge chasm between providing a true safety net, and turning ourselves into another failed welfare state. Governments never seem to get it right.
Like bad cooks politicians can never seem to figure out the correct mixture of financing to:
• Help people who work hard to have the opportunity to prosper if they do a good job, and fail if they don’t.
• Provide adequate food, shelter, housing, and medical assistance for the very young, the very old, the very sick and the very crippled.
• Not leak huge sums of monies to the growing number of freeloaders.
• Not leak huge sums of moneys to political corruption.
This is the primary danger of a
fiat money system.
When the government has the power and the will to print unlimited monies; there is a sense of prosperity for awhile. At the same time the government is increasing its own power base (because it doles out the money).
Eventually though excessive currency creation (especially of great magnitude) almost always (if not always) leads to waste, corruption, and
debasement of the currency.
We don’t want another saying like “ Not worth a Continental “ to permeate into our language with today’s dollar.
Return from Not Worth a Continental to Bad Monetary Policy