Part 3/8:
The Consequences of a Fiat System
This transition created an environment where countries could run perpetual deficits without the constraints imposed by a gold standard. The results have been stark—since 1971, the U.S. has not run a budget surplus, leading to an increase in national debt and a culture of borrowing. The implications have permeated various facets of life, from skyrocketing costs of living to diminishing purchasing power.
People began voicing their discomfort with the economy—the feeling of unease grew as inflation rates rose and unemployment figures remained high. Indeed, the relationship between wages and inflation has widened, with many Americans now needing two incomes to maintain a standard of living their grandparents achieved with one.