What were the economic failures of the Articles of Confederation?

The Articles did not refer to the provision for a national tax, as central government power was kept quite limited. Congress was not given the power to tax and could only request money from the states which meant that it and the army were often short of money. In order to attempt to overcome this, Congress printed more money, which in turn led to high inflation and loss of creditor confidence. Moreover, Congress had also been denied the power to regulate international and inter-state trade and as a result each state retained control over its own trade policies. This led to high inter-state trade tariffs that damaged the economy of the newly independent USA. These issues created serious problems for the new Confederacy and this was made worse because of the economic legacy of the War of Independence. Not only did war damage affect the economy, but also the loss of preferential trade with Britain following the end of the war closed off the Thirteen States' main export market.

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