Once Legal Tender Laws Are Established, Debt Repudiation through Monetary Depreciation Becomes a Common Practice of Government Finance

Government achieved full control over paper money with the passage of legal tender laws, which dictate to people what their legal money can be. Such laws are obviously meaningless and superfluous wherever the ordinary law of contract is respected. Where government wants to issue inferior coins or paper notes, it must use coercion in the form of legal tender legislation. It then can replace honest money with dishonest money, gold coins with fiat notes, and silver coins with money tokens; falsify the exchange ratios between both forms; and discharge its debt with fiat notes or make payment with tokens. In fact, once legal tender laws are enacted and enforced, debt repudiation through monetary depreciation becomes a common practice of government finance.

--Hans F. Sennholz, Money and Freedom (Cedar Falls, IA: Center for Futures Education, 1985), 24.