Debasement and the debt monster

“Blessed are the young for they shall inherit the national debt”

Herbert Hoover

It is a weakness that has probably plagued humanity ever since Adam and Eve were kicked out of the Garden. Why deal with a problem today when you can kick it down the road to be handled by someone who is not you? Our world is filled with temporary fixes meant to placate the public today at the expense of burdening the future.

Some of the best examples today and throughout history come through short-sighted economic decisions. And the bigger the Empire the bigger the calamity. Such as it was in Rome and such as it is in the United States. Two predictable paths to calamity involve currency debasement and excessive debt*. Whether it is debasing a coin or moving off the Gold Standard, the cost of the Empire cannot be hampered by the limitations of a metal backed currency or the demands for a balanced budget.

Debt and debasement are also commonly cited characteristics of a country in decline. There’s a popular YouTube video that’s been floating around lately. It outlines seven stages that each late stage Empire goes through as it returns to earth. It is supposedly ascribed to John Bagot Glubb. It’s been applied to Spain, Great Britain, the Soviet Union and now the United States of America.

Empires rarely collapse from a single cause. They weaken when military overreach, fiscal strain, currency decline, and political decay reinforce one another, each making the others worse. Rome and the United States are separated by two millennia, but both have faced the hard problem of financing global power without destroying confidence in their money.

Back to the theory. I’ve seen a couple variations of the stages but the most popular version lists the stages as such-

Stage 1: Military overextension
Stage 2: Currency debasement
Stage 3:Debt spiral
Stage 4: Loss of productive capacity
Stage 5:Social decay (consuming not creating wealth)
Stage 6: Loss of currency reserve status
Stage 7; Collapse

Generally speaking it makes sense. I don’t know if each step needs to happen in sequence but we can all agree that the list above contains characteristics of an Empire in decline. For purposes of this essay I want to focus on Stages 2 and 3- Debasement and Debt. We will start with Rome and then see if we can draw some connections with America.

Roman debt and debasement

As Rome’s empire and obligations expanded, emperors repeatedly reduced the precious metal content of the denarius and related coins, stretching the money supply while keeping face value constant. That may have solved short-term revenue problems, but it also weakened trust in money, contributed to inflation, and pushed the burden of adjustment onto ordinary people.

As a specific example, let’s look at the Roman Denarius. It was the highest value silver coin and was considered the workhorse of the Empire. It had been around since the days of the Republic but its place was cemented when, in roughly 23 BC, Augustus standardized Roman coinage establishing a highly structured trimetallic system (gold, silver, and base metals) with fixed weight standards and exchange ratios. (Note: For a more detailed view of Roman coinage I suggest you visit the Economics page here)

At this time the Denarius weighed just under 4 grams and was minted at 98% purity. A typical laborer or soldier could expect to earn approximately 1-2 denarii a day and its value has been estimated at around $50 today. As a point of reference, during the time of Trajan a soldier could expect to pay around 15 denarii for a good pair of boots. (link)

This consistency didn’t last long and Nero was the first Emperor to debase coinage by pushing the silver purity down to 93% and overall weight down to 3.4 grams. He did this primarily to pay for the reconstruction costs associated with the great fire of Rome as well as pay for the costs of the Parthian War. Initially there was little economic consequence to these actions as the Empire’s growth and expansion continued to ensure prosperity. In light of this prosperity, successive Emperors would continue this trick such that by the end of the Pax Romana the silver content was down to about 70% during the reign of Marcus Aurelius.

Things only accelerated during the Severan Dynasty (193-235 AD). To ensure the loyalty of troops, Severus reduced the silver content to nearly 60%. His son, Caracalla, introduced a new coin called the antoninianus (the “double denarius”), which was intended to equal two denarii but only contained a fraction of silver in the original denarii.

This led to the eventual collapse during the Crisis of the 3rd Century. During this period of intense political instability and civil war, the denarius became entirely debased. Silver content plummeted to between 2 and 5% with the coin merely consisting of a copper core thinly dipped in silver. The population noticed this and tried to hoard older coins as a store of value. It was also during this time that “coin clipping” became a wider scale practice. If you’re interested in reading more about coin debasement I suggest you read this.

Later Emperors like Diocletian (updated reforms of three metal system) and Constantine (introduction of the Solidus) made significant reforms to try to restore stability within the monetary system. These actions coupled with tax reform, we’ll get to that in a moment, and price fixing created a momentary reprieve but they ultimately didn’t solve the problem. In fact it could be argued that they helped lay the groundwork for the rigid system that paved the way for the serfdom model of the middle ages.

Coinage was the empire’s trust mechanism, the medium that let people buy, sell, pay taxes, and store value. When the state diluted that medium, it effectively asked citizens to accept less real value for the same nominal coin. The result was predictably corrosive: people hurried to spend money before it lost more value, prices rose, and the government had to debase again to keep up with its own obligations.

Now let’s pivot to the reason why debasement had to take place in the first place- debt. Rome did not use “debt” in the modern Treasury-bond sense, but it did live with a permanent fiscal problem: the state needed more resources than its tax base could reliably supply. Military costs, bureaucracy, civil conflict, and frontier defense all demanded spending, while expansion slowed and the easy gains from conquest declined. As illustrated above, emperors responded by debasing coins with cheaper metals, which increased the money supply and raised prices.

Roman tax pressure

Debt became so toxic that the Imperial government ultimately forced the local government to collect taxes through the Curiales. These were local magistrates and mid-level landowners and they were held personally liable for collecting their city’s imperial tax quotas. You can imagine how the locals took to this approach.

Debt did not occur in a vacuum. Roman writers described a state growing heavier, more predatory, and less productive. Ammianus Marcellinus wrote of “the burden of tributes” and taxes so severe that distinguished families fled the countryside and others were crushed into poverty and prison. Gibbon likewise argued that the multiplication of officials and ministries increased expenses while oppression fell on the population.

That tax pressure damaged the very base Rome depended on. As Gibbon observed, “the lands were left without cultivation” and “the arts were neglected,” so the public revenue fell from the same policies used to raise it. The empire was, in effect, eating its own tax base. Higher taxes and more coercive collection may have bought time, but they also weakened productive activity, encouraged evasion, and reduced the long-term capacity of the economy.

This matters because Roman fiscal decline was not just about money creation. It was about the interaction between tax burden, military spending, and falling confidence in the state. Debasement was a symptom of a deeper structural problem: Rome had expanded beyond the fiscal and administrative system needed to support it indefinitely.

Inflation and collapse

The clearest economic consequence of Roman debasement and debt was inflation. Simply put, when too much money chases too few goods, prices rise. In Rome, the increase in money supply was not matched by equal growth in productive output, so the purchasing power of each coin fell.

Cassius Dio captured the broader meaning of the decline when he described a transition “from a kingdom of gold to one of iron and rust.” That phrase is memorable because it links monetary decline to civilizational decline: when money loses quality, institutions, discipline, and political coherence often weaken too. Ammianus and later observers also described corruption, declining morale, and an empire increasingly dependent on extraction rather than growth.

The Roman state tried reforms, including the monetary reforms of Aurelian and Diocletian, but these did not solve the underlying problem for long. Once trust is damaged and fiscal demands keep rising, reform can slow the decline but not necessarily reverse it. The lesson is that monetary fixes without structural reform tend to postpone, not prevent, crisis.

The U.S. parallel

The modern United States is not Rome, but there are real parallels worth considering. The U.S. has operated under fiat money since the end of gold convertibility in 1971, when President Nixon closed the gold window and effectively ended the Bretton Woods system. The Federal Reserve History account explains that this move responded to inflation, a looming gold run, and the imbalance created by large overseas dollar holdings.

That change was not the same as Roman debasement, but it did mark a shift away from commodity restraint and toward policy-driven money. Fiat currency is sustained by trust in institutions, productive capacity, and the credibility of monetary authorities. When that trust weakens, inflation can become a signal that the currency is being stretched faster than the economy’s real output can justify.

Rome debased their coins….why don’t we try it too?

Like Rome the US faced pressure as it tried to balance its growing governmental obligations and a recession with the need to maintain confidence in the dollar. Even before Bretton Woods took place the US was already on the path to debasement. You could argue that it started with the Gold Reserve Act of 1934 which nationalized privately held gold and began the devaluation of the dollar. In 1949 a quarter was 90% silver and 10% copper. 1964 would be the last year that dimes and quarters were struck with this much silver. The Coin Act of 1965 would mark the end of any attempts to ensure quality metals in our coins and today our quarters are 92% copper and 8% nickel.

And like Rome debasement was a symptom of the need to pay for expanded government initiatives. In this case it was the Vietnam War and newly created entitlements under Nixon. A few years of balance at the end of the Clinton years notwithstanding, the US debt has continued to grow consistently regardless of what party or President is in office. The concept of fiat currency means that coin debasement is less problematic than it was in Rome but it still reflects the reality of a government straining its monetary stability.

As of May 5, 2026, total gross US national debt was $38.91 trillion, with debt held by the public at $31.26 trillion and intragovernmental debt at $7.65 trillion. That is not an imperial collapse by itself, but it is evidence of a government that increasingly relies on borrowing to sustain spending. And behind this debt is the lurking prospect of inflation.

The Bureau of Labor Statistics reported that the CPI-U rose 3.8 percent over the 12 months ending April 2026, with food up 3.2 percent and energy up 17.9 percent. Separate forecasts in May 2026 suggested inflation could remain elevated for the rest of the year. A modern economy is very complicated and it is difficult to definitively measure cause and effect, but it is very safe to say that increased government spending coupled with a deliberate printing of ‘fiat’ currency has been a major contributing factor to inflation. It’s currently far from Weimar Germany or Turkey levels but don’t be surprised if it continues to increase.

A good way to help explain how things like debasement, increased spending, and the resulting inflation negatively impacts purchasing power is to look at home purchases over the past 50 years. In the 1970’s an average home price was roughly 1.8 to 2 times the median family income. Today it is closer to 7 times. Sure certain consumer goods, think electronics have consistently gotten cheaper, but most permanent goods have continued a steady climb towards expensive. This chart from the Visual Capitalist also does a great job illustrating the decline in our purchasing power.

Similarities and limits

It is pretty easy to draw comparisons between the current U.S. Economy and the later stage Roman Empire based on observations tied to debasement, debt, and expansion of government spending and programs. But is it that easy? Are our destinies that closely tied? This kind of review is useful as a warning model, not as proof of destiny. Rome fits the pattern strongly because fiscal extraction, debasement, and administrative overload fed one another until the state could no longer command the same loyalty or productivity.

The U.S. shares some features of the early stages, but not all. America still has enormous productive capacity, deeper capital markets, stronger institutions, and a global monetary role that Rome never had in the same form. At the same time, the end of gold backing in 1971 and the large debt burden today show that the U.S. relies heavily on confidence rather than convertibility.

That distinction matters because reserve-currency status can delay consequences, but not abolish them. If a country can borrow cheaply in its own currency, it can defer hard choices for a long time. But if debt keeps growing faster than productive capacity, and if inflation repeatedly erodes trust in the currency, the state eventually faces a choice between reform and decline.

Final judgment

Rome can serve as a logical comparison for America, but only as a partial one. The strongest parallel is not that the United States is doomed to “fall like Rome,” but that great powers often make the same mistake: they confuse short-term financial tricks with long-term strength. Rome debased its coinage to pay armies and preserve order; the modern U.S. expands debt and manages inflation within a fiat system to preserve growth and stability.

So the right conclusion is not that America is Rome, but that America should learn from Rome. Rome shows that when a state grows too dependent on military spending, bureaucracy, debt, and monetary erosion, it can hollow out the economic base that sustains it. The United States still has the ability to correct course, but only if it treats debt, inflation, and productive capacity as serious limits rather than accounting abstractions. In that sense, Rome is a warning, not a prophecy.

If Americans continue to tolerate rising debt, persistent inflation, and a political culture that rewards consumption over production, the Roman analogy becomes more persuasive. If instead the country restores fiscal discipline, protects the value of money, and rebuilds productive capacity, then the comparison remains only a historical lesson. Rome fell because it lost the ability to match power with solvency; America’s advantage is that it can still choose not to repeat that mistake.

Additional Resources

Told In Stone- link

Forbes article about decline in purchase power- link

A series of charts from the conservative leaning Peter G Peterson foundation breaking down the current US budget- link

How Roman elites beat inflation with gold (Classical Numismatics YouTube)- link

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* It can be argued that a nation should incur a certain amount of debt in order to fuel healthy growth. How much debt can be sustained probably determines what side of the political aisle you fall. Here’s one article from the UN and one from the Brookings Institute. Interpret them however you’d like.