By the 1780s, France's once prosperous economy was in decline. This caused alarm, especially for merchants, business owners, and bankers of the Third Estate. On the surface the economy seemed to be perfectly fine, because both production and trade were rapidly increasing. However, the numerous taxes made it impossible to conduct business profitably within France. Further, the cost of living was skyrocketing. In addition, bad weather in the 1780s caused widespread crop failures, resulting in an alarming lack of grain. Bread was a staple of the diet of the commoners of France; most families consumed at least three 4lbs loaves a day. The purchase of bread consumed about 50% of a worker's wages--when times were good. So, when the cost of bread …show more content…
Part of the problem was the frivolous spending of the king, Louis XVI. Louis also inherited considerable debt from previous kings. France had invested 2 billion pieces of silver to help young America win its war against the British. This had nearly doubled the government's debt. Over half of France's revenue was now going to pay interest, and the debt was increasing at the rate of 100,000,000 pieces of silver a year. In 1786, when bankers refused to lend the government any more money, France faced a financial crisis. France had to either default on its debt or raise taxes. Strong leadership my have avoided these problems. However, Louis XVI was asleep at the wheel and allowed matters to drift. He paid scant attention to his government advisers, and had little interest in the details of ruling. Rather than cutting expenses, Louis put off dealing with the crisis until France was practically broke. It became clear Louis had to raise taxes. The question was upon whom to impose the tax? The members of the Third Estate (see below) were already being taxed to the limit. Thus, new taxes would have to be imposed on the First and Second estates., i.e. the clergy and nobles. The problem would be getting such taxes approved by