… is from pages 502-503 of the late Wesleyan University economic historian Stanley Lebergott’s great 1984 book, The Americans: An Economic Record (footnotes deleted; link added; brackets and ellipses original to Lebergott):
The “progressive deterioration in the value of money through history is not an accident, and has behind it two great driving forces,” wrote Keynes in 1924. One was the “superior political influence of the debtor class.” That force has been only mildly effective in the United States. Connecticut and Massachusetts experimented by printing paper money in the 1740s and Rhode Island by printing it in the 1790s. These represented the high point of debtor influence. Populism’s failure in the 1890s, and the limited “reflation” of the 1930s, showed that such forces have been weak in the United States.
The second force, said Keynes, was “the impecuniosity of governments.” What is “raised by printing notes [i.e., money] is just as much taken from the public as is a beer duty or an income-tax…. In some countries it seems plausible to please and content the public by giving them, in return for the taxes they pay, finely engraved acknowledgements on water-marked paper.” Inflation as a “potent instrument of government extraction” surfaced in 1968-69 when the federal government rapidly increased expenditure for both a war in Vietnam and a “war on poverty” at home. Over the next decade the voters revealed their desire for ever more programs of expenditure, welfare and/or defense, and an almost equal desire to pay no increased taxes for such programs. Inflation proved a way to reconcile these conflicting desires.
DBx: History will tell if, in the 21st century, debtors in America remained as politically neutered as they were in earlier centuries.