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How a Poor Economy Toppled Ancient Rome

September 23rd, 2012

We’ve all heard of the fall of the Roman Empire, but do you actually know what led up to it?

Ancient Rome ultimately fell victim to economic woes that, unfortunately, aren’t all that different from what we’re dealing with today.

The Roman economic woes began with Emperor Commodus, who taxed the upper class (known as “Senators” in those days.  Ironic, huh?)  and gave the money to the lower classes.  As a result, the vocal lower classes adored Commodus — and they held the same love for Nero, who kept up the extreme taxation and redistribution long after Commodus was gone.

Eventually, though, Rome’s economy took a tumble.  As a result, several Emperors — spanning hundreds of years — debased the currency.  That’s a fancy way of saying they used fewer precious metals to make their coins so that they could make more of them.  Unfortunately, that made the value of the coins plummet, and inflation went sky-high.

In order to make up the difference, the Emperors increased taxes.  But it wasn’t just for financial purposes.  Today, economic experts who have studied Rome’s finances say the Senators were deliberately over-taxed in order to decrease their political power.

However, once the Senators ran out of money, it was up to the lower classes to pay to maintain the empire — especially the military troops that were stationed at Rome’s borders.

Unfortunately, though, the lower classes couldn’t foot the bills by themselves.  Eventually, the military crumbled, and the Turks were able to take over Eastern Rome.  A few decades later, vandals officially toppled Western Rome.

Today, in America, we’ve just uncovered a secret video of the President proclaiming his support for redistribution.  There’s also talk of increasing taxes only on the upper class.  And, The Fed is, in essence, printing more money (something they call “Quantitative Easing”).

It took the Romans centuries to see the results of their economic mistakes… Are we headed down a similar path?

 

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