The Depression of the 1780s and the Banking Struggle

Read more on this subject: Economy – Economics USA
News Story Source:, By Murray N. Rothbard
But this kind of pseudo-explanation merely betrays ignorance of economics: a boom in imports reflects voluntary choices and economic improvement by consumers, and this expression of choice can scarcely be the cause of general depression. In short, an improved standard of living for the bulk of consumers reflects improvement and not depression. It is impossible for consumers to buy "too many" imports, for they must pay for them with something, and this payment is financed from exports or from previously accumulated specie. Specie, indeed, had been accumulated in the colonies by the end of the war from British and French war expenditures. In either case, the payments reflected affluence rather than destitution, and these purchases were an enormous help after the ravages of the war. A specie drain is also the result of consumer desires and obviously cannot continue indefinitely. Clearly, Americans could not merely buy from abroad and not sell; indeed, if they could have done so
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