“In the world today, a nation’s financial collapse can threaten its political and social stability. It was the same in France in 1789.” (Burley) The first recognizably modern crisis of state bankruptcy – where a nation’s financial collapse led directly to political and social upheaval, was experienced by France as the prelude to the French Revolution. In the years leading up to the French Revolution, there were a number of significant financial problems stemming from many years of bad financial decisions made by previous rulers. In the 1700s, the financial crisis including bankruptcy of the French Government, taxes and agrarian crisis led to the French Revolution. Long before the French Revolution, France was in a major economic crisis. Along with massive unchecked spending on the part of the monarchs themselves before the revolution, there were a number of other issues that had a dramatic impact on the French financial situation. First, the national debt was quite large in the years before the French Revolution. In addition to the fact that there were several bad decisions made by officials and advisors, they tried to improve the financial situation after the Seven Years’ War and the American Revolution, both of which almost decimated the treasury due to the size of the armies required. Besides the costs of the wars, King Louis XVI built a giant palace called “Versailles which was a testament to unchecked spending with vast amounts of gold decorating the