Introduction to page by page summary ebook of The Revolution: A Manifesto by Ron Paul

In a eulogy delivered by Abraham Lincoln for Henry Clay, Lincoln described Henry Clay as his “beau ideal of a statesman.” That is exactly how I feel about Ron Paul. There are very few public figures who always stand up for peace, civil liberties, a free market, property rights, and a limited government. As far as I can tell, he is the only politician who consistently stands up for such things. These are the positions that I’ve always associated with truly dignified leaders. I had come to assume that such leaders didn’t actually exist.

Interestingly, even ironically, I was working for the Department of Defense when I first heard of Ron Paul. Both of my parents were political junkies and the 2008 election was the first election I decided to pay real attention to. The first debate I watched was the first Democratic primary debate. I preferred the two most fringe candidates in the Democratic primary debate: Dennis Kucinich and Mike Gravel. They were the only candidates that appeared to have true passion and were genuinely trying to communicate something meaningful. However, they were so dreadful on economic policy that I just couldn’t support them in good conscience.

A week or so later, I watched the Republican debate and heard Ron Paul speak for the first time. Ron once said in an interview that he had been a libertarian his whole life but just didn’t know it until he started reading libertarian philosophy. That perfectly describes how I felt. Here was a man speaking what I’d always known to be true but had never heard said is such emphatic terms. War is bad. The U.S. government has no right to invade countries that aren’t threatening the U.S.. People who make money serving others through the free market deserve to keep their money. The government doesn’t have the right to spy on us and harass us. Those who live off of other people’s taxes act immorally. Of course, there was also some new stuff that I’d never heard of before. Most importantly, I learned about the damage that the Federal Reserve does to the economy by printing money and manipulating interest rates. Ron mentioned the Austrian Theory of the Business Cycle. All of this in just on debate!

I was hooked. I made sure to watch every single debate. What stood out to me above all was Ron Paul’s sincerity. There was always an important moral component to his arguments. The other candidates in the Republican primary were so unimpressive that I hardly even remember who else ran. I know John McCain was one of them because he got the Republican nomination. All of the other candidates were entirely forgettable. They appeared to just be saying what they were supposed to say, not what they really felt. During these debates, Ron Paul completely won me over to his view of the world and what liberty means.

When I found out that Ron Paul would be writing a new book, I pre-ordered it months in advance. In the meantime I googled his name every day and followed the links that came up. This was the beginning of my education on liberty. There existed an entire tradition of thought that I never knew about. Thanks to Ron I have been turned on to hundreds of writers who have taught me what liberty is and what it means to be free. By studying liberty and adhering to the lessons learned I have become a better person.

After months of waiting, Ron’s book arrived and I read three times in a row back to back. I then insisted that my family read it. Most have become at least limited Ron Paul converts. It is easy to make conversions when you hold the truth in your hands. I’ve read the book a couple of times since then. Hands down, The Revolution: A Manifesto by Ron Paul is my favorite book of all time. It is clear, easy to read, and inspiring on every single page. It would be an error, however, to mistake its simplicity for a lack of profundity. In fact, it is the trait of a truly great teacher that he takes things that are very profound and makes them seem easy. Ron Paul is just such a teacher. This book will teach you about the Constitution, the economy, the rights of a free people, the nature and importance of money, and so much more. Thanks to Ron Paul, I have since quit my government job (you should too) and now work in the private sector. Never again will I live off of the sweat of another persons brow (neither should you).

My purpose in writing a page by page summary of this book is twofold. First, I’ve never written anything before and I figured that this would be a good way to get my feet wet. Second, my goal is to provide the student of liberty with notes by which to remember the important lessons contained in the pages he or she will read. Sometimes a reader wants to have a reference easy at hand without having to dig back through the book. Of course, reading this ebook is no substitute for reading the real book in its brilliant entirety.

If you are a student of liberty and the passion for freedom burns in your heart, I salute you. We are brothers. I hope this ebook helps you in your studies.

Adam Pearson

Ron Paul – The Revolution: A Manifesto – Page 163 through Page 167

Page 163: The president does not have the authority to create and enforce new laws on his own. However, he does have the ability to decide which laws will be most stringently enforced. For example, the president could decide to provide no resources for the prosecution of medical marijuana patients. He could refuse to enforce any law that violates the constitution. The president can take this action even if the congress passes unconstitutional laws. As commander in chief of the armed forces, the president can immediately bring all troops home from around the world. Some say bringing home our troops would cause chaos, but chaos already exists.

Page 164: The president should make it clear that the United States has no intention of attacking Iran. Diplomatic relationships should be resumed and sanctions removed. This would cause the price of oil to fall immediately and would salvage America’s diplomatic credibility. The White House should cease looking for justifications to conduct more and more military operations. The American people should not have their patriotic sensibilities manipulated into supporting pointless overseas conflicts. We must end our government’s interventionist foreign policy and hold our government to the same standards that we claim to hold other governments to.

Quote: “In other words, we need to keep our wits about us, and replace our bull-in-a-china-shop foreign policy with a statesmanlike approach that is appropriate to the real needs of American security.”

Page 165: If we are truly opposed to isolationism, we should lift the sanctions against Cuba. Sanctions hurt the population of the target country and have a tendency to empower the government that is in charge. It is ridiculous that Americans can’t travel to and trade with Cuba. Bringing troops home from around the world is essential to getting our national budget under control. It doesn’t make sense to have 75,000 troops in Germany when we’re going broke. The president should notify our allies and begin a troop withdrawal immediately. This type of foreign policy is the proper one for a peaceful republic. Following such a foreign policy would make the military more efficient and effective at protecting Americans. Removing the burden of supporting a worldwide military would strengthen our economy.

Quote: “I spoke to a huge rally – with Cuban Americans making up 70 percent of those in attendance – where everyone cheered the message of freedom.”

Page 166: The policy opinions put forth in this book are the only practical options for the United States. Ignoring them will lead to more losses of freedom, more war, and a continued deterioration of the economy. The United States cannot continue to function as an empire. Like all empires in the past, we have spread ourselves too thin and face an economic meltdown. We can either accept reality and scale back the empire or wait until reality is imposed on us via national bankruptcy. There is no doubt that pursuing such a policy would be a challenge. But it may not be as difficult as many would suppose. We could finally begin to get out from underneath a crushing debt load and the effects of such a policy would have miraculous effects on our economy. Doing nothing would be much more difficult. The young people of the United States of America are waking up to the reality of our situation much faster than any other segment.

Quote: “This is the fate of all empires: they overextend themselves and then suffer a financial catastrophe, typically involving the destruction of the currency.”

Page 167: We are not destined to go the way of other empires in the past. The American people have a say about which direction they want the country to go in. If the American people want to be free of a burdensome, war making, money printing government, the choice is theirs.

Quote: “Ours is not a fated existence, for nowhere is our destiny etched in stone. In the final analysis, the last line of defense in support of freedom and the constitution consists of the people themselves. If the people want to be free, if they want to lift themselves out from underneath a state apparatus that threatens their liberties, squanders their resources on needless wars, destroys the value of their dollar, and spews forth endless propaganda about how indispensable it is and how lost we would all be without it, there is no force that can stop them.”

Ron Paul – The Revolution: A Manifesto – Page 157 through Page 162

Page 157: Some people hold the philosophy that human beings don’t care about freedom. All they care about is being fed, clothed, and entertained. That is false. As an example, the American Revolution would not have been possible unless the majority of Americans cared deeply about freedom. Contrary to popular belief, the vast majority of Americans supported the war for independence from Great Britain.  

Page 158: Liberty isn’t given a fighting chance in American society. Many young people today don’t even know what liberty means and how it relates to American history. They get excited when they hear about it for the first time. There is a great battle of ideas taking place and the best way to fight the battle is to learn about liberty. If a true supporter of liberty ever becomes president, there are few things such a person must embrace. An attitude change must take place regarding what the role of government should be. The United States government should not be looked at as the policeman of the world. Also, the notion that the government should take care of us from the day we are born until the day that we die should be completely done away with.  

Quote: “We are engaged in a great battle of ideas, and the choices before us could not be clearer. I urge those who agree with this important message to educate themselves in the scholarship of liberty.”

Page 159: The United States government borrows $2.2 billion everyday to finance the welfare/warfare state. Most of that money comes from China and Japan. It is unrealistic to believe that foreign countries will continue to finance American profligacy. This is especially true becasuse the dollar denominated bonds that they hold continue to lose thier value due to Federal Reserve money printing. Once foreign countries pull the plug, reality will come crashing down upon us. To grow out of our debt problems, our economy would have to grow at double digit rates for 75 years in a row. Even though politicians don’t like to talk about it, our current way of life is going to come to an end. The good news is that more and more Americans are becoming aware of the problems and are willing to face these problems with wisdom and fortitude.

Quote: “They hope and believe that the American people are too foolish, uninformed, and shortsighted to be concerned, and that they can be soothed with pleasant slogans and empty promises of more loot.”

Page 160: In the short run, all government programs need not be abolished immediately. Domestic social programs should be funded by scaling back our overseas military committments. People who have learned to be dependent on government programs should be eased off, not thrown out into the street. However, the goal should be to eliminate many government programs entirely. Our guide for which programs to eliminate should be the constitution. Many of these programs are insolvent in any event. Social Security recipients have planned their lives according to the promises they received from the government. Thier benefits should continue. The government should not, however, be able to borrow money from the Social Security trust fund. As it stands now, there is no money in the trust fund, it has all been borrowed.

Quote: “Current workers are not building up a Social Security nest egg for themselves; they are giving their money to current recipients and hoping there will be enough workers to support them when they reach retirement age.” 

Page 161: Young people should have the right to opt out of Social Security. Current Social Security benefits should be financed by scaling back overseas expenditures. If we are truly in favor of shrinking the size of government we must cut military bureaucracies as well as welfare bureaucracies. The budgets of every major federal department should be immediately frozen. Except for the department of State and the department of Justice, almost all federal departments deal with issues that the constitution leaves up to the various states. Federal bureaucrats should no longer be able to get rich off of these unconstitutional powers.

Quote: “If we really oppose Big Government, we cannot make an artificial exception for bloated military bureaucracies, which traditional budget-minded conservatives never hesitated to look at seriously as a source of potential savings.”

Page 162: We no longer have the resources to support so many government programs. The only thing holding the American people back is a fear of the unknown. They no longer know what its like to be free. For example, we don’t need a federal department of education. Americans can certainly figure out how to educate their children without the help of the federal government. For most of the twentieth century, when there was no federal department of education, the population was much better educated. Cutting these programs would strengthen the dollar which would be a boon for the lower and middle classes. Americans should once again have the freedom to conduct transactions in any money they see fit.

Quote: “It is only our intellectual inertia and lack of imagination that makes us think these departments necessary in the first place.”

Ron Paul – The Revolution: A Manifesto – Page 151 through Page 156

Page 151: As more Germans rushed out to get rid of their money, prices kept getting higher and higher. The German mark lost more and more value until it became completely valueless. In the same year as the hyperinflation, 1923, Hitler made his first attempt to grab power. In November 2007, the U.S. economy experienced price increases of 3.2% or 40% annually. It isn’t impossible that a terrible inflation could occur the United States. Creating and injecting new money into the economy creates investment bubbles. In the 1990s, monetary inflation helped to create NASDAQ bubble. Trillions of dollars were lost when that bubble popped. Politicians hate when the stock market goes down but few ever blame the Federal Reserve for causing the bubble in the first place.

Quote: “Intolerance and extremism always find a readier audience in unfavorable or (as in this case) chaotic economic times.”

Page 152: The Federal Reserve, through artificially low interest rates, misleads investors on a much greater scale than analysts and financial advisers ever could. Printing more money to keep bubbles from popping only makes the eventual, inevitable downturn even more severe. The housing bubble was created by the Federal Reserve’s cheap credit policy. It printed money and gave it to the banks. With so much extra money to loan out, banks started making loans to anybody and everybody. Borrowers took the money out into the market and started to buy bigger and more expensive houses. Statistics show that the increase in mortgage debt since 2001 equals almost precisely the increase in the money supply since 2001. People started using their houses like ATMs, borrowing against the increased value of their house to go out spend.

Page 153: The recession that took place in 2001 was the only recession in history that wasn’t accompanied by a decline in housing starts. In fact, between 1998 and 2005, home prices increased by 45%. When the bubble finally burst, as it always must, people were forced to suffer dire consequences. Homeowners lost their houses due to foreclosures, personal bankruptcies abounded, and many companies went out of business. The blame must be placed where it belongs, with the Federal Reserve. It caused the bubble in the first place by injecting so much new money into the economy. Whenever the government intervenes in the economy there will be unexpected results.

Quote: “Government intervention always has unintended consequences that cause harm, a truism that applies just as strongly to interventions into the monetary system. Devastated homeowners are only the latest victims.”

Page 154: Debate on the efficacy of our monetary system must become a part of the public discourse. The issue has been ignored for far too long by politicians and public intellectuals. The Federal Reserve has convinced the public that Federal Reserve operations are far too complicated for the public to understand. We are supposed to just accept that the Federal Reserve is a necessary institution and not question whether we’d be better off without it. There is a stark lack of Federal Reserve critics pointing out its devastating effects on the economy. It is time to start taking a hard look at the Federal Reserve and coming up with ways to fix the monetary system.

Quote: “For most people, in fact, the Fed is a complete mystery, its operations incomprehensible. That seems to be just the way the Fed likes it.”

Page 155: The first step towards restoring a sound monetary system is legalizing competition in money. Americans should be allowed to use anything they wish, especially precious metals, as money. Those who prefer to use depreciating dollars as money would also be allowed to do so. There are currently many hurdles to using gold and silver as money. For example, governments at the federal and state levels charge sales and capital gains taxes on sales of precious metals. Nobody else is proposing any solutions for protecting Americans from the ravaging of the value of the dollar caused by the Federal Reserve. Apparently, almost nobody in the political arena believes it possible that an economic crises can occur which the Fed will not be able handle.

Quote: “What if economic law, which the Fed can no more defy than it can repeal the law of gravity, is about to hit the Fed and the American people like a tidal wave, before which little rate cuts here and there are like the tiny umbrella Wile E. Coyote puts over his head to protect himself from falling boulders?”

Page 156: If those who advocate sound money are wrong, allowing competition in the money market is no big deal. Neither is eliminating a few taxes on gold and silver. However, if they are right their plan provides a way for Americans to avoid a true crises. The time has come to completely reform the monetary system. The time for trivial, inconsequential changes has long since passed. Trying to cure symptoms of the problem and not the problem itself is sure to lead to failure. Printing more money cannot solve problems caused by printing too much money. Financial bubbles are not inherent to the free market system. We must start placing the blame where it belongs.

Ron Paul – The Revolution: A Manifesto – Page 146 through Page 150

Page 146: Rising interest rates will reveal that some projects must be abandoned. This will lead to temporary economic problems such as unemployment and losses. The interest rate is an indicator to business people. It lets them know whether there are ample savings available for investment. If there are a lot of savings, the interest rate will be lower. If very little savings are available the interest rate will be higher. When the interest rate is determined by the market, based on real savings, long term investment projects are sustainable. Only projects that make sense based on reality will be undertaken. When the Federal Reserve artificially lowers the interest rate, more projects seem like good investments even though they cannot be sustained by actual savings. F.A. Hayek won the Nobel Prize in economics in 1974 for proving that business cycles are set in motion by the central bank’s artificial lowering of interest rates. If the Federal Reserve continues to cut rates in the face of a recession, they can temporarily postpone the day of reckoning. However, such a policy only makes the inevitable crash worse when it finally arrives. If the central bank continues to print money to fight off the recession, hyperinflation may result.   

Page 147: In some cases central bank policy will no longer stimulate the economy, even temporarily. This was the case with Japan in the 1990s. Their central bank cut interest rates all the way to zero percent and left it there for many years. Their economy showed no improvement as a result. Alan Greenspan was recently interviewed by Jon Stewart. Stewart asked him why the market couldn’t set interest rates without a central bank. Shockingly, Greenspan struggled to give a good answer as to why the Federal Reserve should exist. If we reject central planning of the economy, we must reject a central bank. Money is involved in almost every economic transaction. It is impossible for a single individual to determine the correct interest rate. Before becoming the chairman of the federal reserve, Greenspan was an advocate of the gold standard.     

Quote: “Even though we point to our devotion to the free market, at the same time we centrally plan our monetary system, the very heart of the economy.”

Page 148: Ron Paul and Alan Greenspan once ran into each other at an event where Greenspan was giving a talk. Ron Paul brought a copy of an old article with him in which Greenspan had vigorously defended the gold standard. Greenspan said that he wouldn’t change a word of it. However, during a subsequent committee meeting Ron Paul confronted Greenspan with the article. In front of the commitee, Greenspan stated that he no longer held the opinions put forth in the article. He even went so far as to say that the Federal Reserve plays no part in financing government deficits. It is ridiculous for any Federal Reserve chairman to blame congress, and congress alone, for deficit spending. It would be impossible for congress to continue borrowing at such low interest rates if it wasn’t for the Federal Reserve. The whole system is flawed.

Quote: “Congress could not get away with spending beyond our means year after year if we did not have a Federal Reserve System ready to finance it all by purchasing bonds with money it creates out of thin air.”

Page 149: The question that Americans need to ask themselves is whether they want a system under which politicians can simply print money to support their schemes. The great benefit of the gold standard is that more gold cannot be created out of nowhere. If politicians want to increase government spending they have to take gold from the people. The money supply under a gold standard remains relatively stable. As an economy becomes more productive due to increased investment in capital equipment, it can produce more and more goods. With the money supply stable and the quantity of goods increasing, gold’s purchasing power becomes greater. People’s money becomes worth more and the standard of living increases. Since 1913, the year the Federal Reserve Act was passed, money has lost nearly all of its value. An item that cost $100 in 2006 would have cost $4.96 in 1913. Yet somehow the Federal Reserve has been immune to criticism.   

Quote: “There is a great dispersion of power in a gold standard system. That is the strength of the system, for it allows the people to check any monetary excesses of their rulers and does not allow the rulers to exploit the people by debasing the money.”

Page 150: Under the gold standard the value of money did actually increase. An item that cost $100 in 1820 cost $63.02 in 1913. The Federal Reserve has recently stopped publishing certain statistics about the money supply. The reason given for ceasing to publish the statistics is that its too expensive to collect the data. However, given the fact that they can create money at will, its more likely an attempt to keep the American people from understanding what Federal Reserve is up to.  If a government continues to create money without end, it risks hyperinflation. This is exactly what happened in Germany in 1923. The French occupied the Ruhr Valley, one of Germany’s main industrial centers at the time. The government told workers in that region to stop working. The German government simply printed money to pay their salaries. Things got out of control and the money began to lose its value very quickly. People rushed out to buy whatever they could get their hands on before the value of money sank even further.

Ron Paul – The Revolution: A Manifesto – Page 140 through Page 145

Page 140: For most of America’s history the dollar has been backed by a certain weight of gold. In 1933 the U.S. government took the country off of the gold standard. The government confiscated the gold of private households and made any contracts that required payment in gold illegal. From that point on the dollar could no longer be redeemed by private citizens for anything other than more paper dollars. However, in 1933, provisions were made for foreign central banks to continue redeeming their dollars in gold. This activity was finally terminated by Richard Nixon in 1971. Other governments saw that the U.S. government was printing too much money and the dollar was losing value. They started to trade in their dollars for gold. Nixon closed the gold window to stop a run on the U.S. treasury.

Quote (James Madison): “The loss which America has sustained since the peace, from the pestilent effects of paper money on the necessary confidence between man and man, on the necessary confidence in the public councils, on the industry and morals of the people, and on the character of republican government, constitutes an enormous debt against the States chargeable with this unadvised measure.”

Page 141: When the Federal Reserve chairman announces that he is going to lower the interest rate, he is referring to the federal funds rate. This is the interest rate that banks charge each other to borrow money. Banks tend to borrow money from each other when they don’t have enough money on hand to satisfy depositors who come in and make withdrawals. When more banks need money and there are fewer banks lending money, the federal funds rate goes up. To keep the federal funds rate from going up, the Federal Reserve buys bonds from the banks that need more money. This acts as an injection of money so that banks can satisfy customers who want to make withdrawals. In order to buy bonds from banks, the Federal Reserve creates new money and gives it to the banks in exchange for bonds. Sometimes banks don’t just want more money to cover withdrawals, they want more money to make new loans. The Federal Reserve buys bonds with newly created money in that situation as well.

Page 142: In order to loan the new money, banks lower their interests rates and lending standards to attract new borrowers. Creating and loaning out new money in this way creates serious problems. It puts more dollars into circulation which lowers the value of the dollar, making people who save in dollars poorer. Bubbles also begin to appear in the economy which must eventually pop and create economic recessions and depressions. In general, the people who receive the new money first are those who are wealthy and politically well-connected.

Quote: “When the money supply is increased, prices rise – with each dollar now worth less than before, it can purchase fewer goods than it could in the past.”

Page 143: The first recipients of the new money get to spend it before prices have risen in general. They enjoy a windfall. However, as the new money makes its way through the economy it starts to raise prices across the board. Many in the lower and middle classes will not see their wages rise in proportion to the rise of prices in general. Those in the lower and middle classes will see their standard of living decline as a result. In general it is government contractors, big banks, and the politically well connected who get the money first. They enjoy a windfall at the expense of the middle and lower classes. Another large recipient of a lot of new government money is the health care industry. This helps to explain why health care costs continue to go up at such a rapid rate. The redistributive effects of money creation were first discovered by the French economist Richard Cantillon.

Quote: “The average person is silently robbed through this invisible means and usually doesn’t understand what exactly is happening to him. And almost no one in the political establishment has an incentive to tell him.”

Page 144: When the government redistributes wealth by creating new money, this is actually a tax. It is a particularly unjust tax because it is hidden from plain view. People feel themselves getting poorer but they don’t know why. It is important to note that Americans throughout history have railed against the effects of paper money. People such as president Andrew Jackson and Senator Daniel Webster were extremely adamant when they spoke about the ill effects of unbacked paper money. The Consumer Price Index (CPI) is a poor indicator of how price changes affect real Americans. It doesn’t include food or energy prices. Economist Ludwig von Mises taught that governments always try to get people to focus on prices instead of growth in the money supply when thinking about inflation.

Quote (Daniel Webster): “Of all the contrivances for cheating the laboring classes of mankind, none has been found more effectual than that which deludes them with paper money.”

Page 145: Inflation is an increase in the money supply. Rising prices are the effect of inflation. When viewed this way, there is an easy solution for ending inflation: demand that the Federal Reserve cease creating new money. When the Federal Reserve creates new money it causes interests rates to go down. New, artificially lower, interest rates encourage people to borrow and make investments that they would not have made otherwise. These new investments create a sense of increasing prosperity. Businesses expand, new projects are undertaken, and in general people feel richer. However, as the new money makes its way through the economy prices begin to rise. To cover rising costs, new loans are demanded. Interest rates begin to rise. Projects that seemed profitable at lower interests rates are no longer profitable.

Quote: “When the Fed artificially lowers rates, it misrepresents economic conditions and misleads people into making unsound investments.”


Ron Paul – The Revolution: A Manifesto – Page 137 through Page 139

Page 137: Americans are deeply worried about the economy but they can’t put their fingers on what exactly is causing the problem. Politicians refuse to frankly acknowledge what is wrong. Pundits and economists tell us that the Federal Reserve just needs to print some more money and the problems will disappear. Americans are told that there is nothing fundamentally wrong with the system. This type of discourse deprives Americans of the true knowledge they need to comprehend the serious issues facing the economy.

Quote: “Read the major newspapers and watch the cable news channels: you will not see any fundamental questions raised. The debate will be resolutely confined to superficialities.”

Page 138: In the year 2000 Ron Paul correctly predicted that a loss of confidence in the dollar would cause grave economic problems in the United States. In 2007 and 2008, the dollar experienced a dramatic decline in market value. Americans must open their eyes and see who is responsible for the destruction of the American dollar. The best way to understand the issue and to fix the problem is to heed the advice of the free market economists who have accurately predicted the predicament that we now find ourselves in. These economists recommend a return to sound money. The Constitution states clearly that congress has the responsibility to protect the value of the dollar by ensuring that only gold and silver are money. The Constitution also prohibits the government from emitting bills of credit, unbacked paper money.

Quote (John Adams): “All the perplexities, confusions, and distress in America, arise, not from defects in their Constitution or Confederation, not from a want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation.”

Quote: “The power to regulate the value of money does not mean the federal government can debase the currency; the Framers would never have given the federal government such a power.”

Page 139: The Constitution gave the federal government the power to legally formalize an already existing market definition of the dollar, in terms of gold. It also gave the federal government the power to regulate the ratio between the prices of gold, silver and any other monetary metal. Accept for the during the Civil War, the federal government actually did a good job of protecting the value of the American currency during the nineteenth century. As a result, prices were relatively stable. The Founders had first hand knowledge of the problems caused by paper currency. The government partially financed the Revolutionary War with paper currency. By making the currency legal tender, the government was able to force it upon the population. So much paper money was printed that by the end of the war, it was worthless. This fact explains why most of the states voted to explicitly prohibit paper money in the Constitution.