Letter: How the US settled debts from Revolutionary war

What Adam Smith said on inflation and the debt trap as noted by Stefan Legge (Letters, January 18) may have been true in 1776, but the immediate subsequent experience was quite different in the UK and in the US. Britain’s very large Napoleonic war debt was substantially paid off by running budget surpluses over the following century.

America’s Revolutionary war debts were serviced, if not actually paid off, by the payment of interest in specie (gold and silver) with revenue from excise taxes.

In neither case were those debts inflated away as predicted.

Robert Denham
Oakland, CA, US

Letter: How the US settled debts from Revolutionary war
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