jpete wrote:So how did the economy grow? Where did all those "robber barons" get all that money?
Because honest money is merely a faith and trust based proxy (substitute) for real wealth, and the seriously badly mis-named and maligned 'Robber Barons' productive enterprise yielded wealth in its only true and pure and honest form. Short version: They earned it and they deserved it! And back then paper currency was convertible (redeemable) in gold or silver on demand, so trust in its ability to serve as a highly mobile and transferable proxy for real wealth was high.
OTOH, printing currency that is redeemable in nothing does not produce wealth. The true Robber Barons are not the producers, they are the unwarranted currency printers.
Wealth is what you achieve by turning something of lesser value into something of greater value by applying ingenuity and labor to it. For example: The difference in value between a tree trunk and the chairs one can make from it is wealth. If I take some blank pages and write a novel upon them I have created wealth. If I take up an instrument or an assortment of them and create music, I have created wealth. If i teach a child to read, write, and cypher, and the child grows into being productive and/or creative, I have created wealth. This is how new wealth is created, and there is no other means whereby to create wealth.
Debased proxy is all you can create with a runaway currency printing press (or with runaway currency creating keystrokes on a computer). Since there is no redeemability, trust (and faith) in the "good faith and promises" of the government is all you have now, and they are violating that faith and trust with every new dollar they create for which the economy has no real wealth to justify it.