The fiscal crisis quickly turned political, with the calling of Assemblies of Notables in 1787 and 1788 and of an Estates General in 1789. The government primarily sought to rally public opinion in favor of new taxes, including a stamp tax and a land tax, because the monarchy was in financial distress and needed new revenue.

For 1788, Weir finds government debt to be 56 percent of GNP for France and 182 percent for Britain, taxes to be 7 percent of GNP for France and 12 percent for Britain, and annual deficits to be about 6 percent of GNP for France. This supports the view that France’s fiscal position was severely strained in the late 1780s.

Fiscal crises arose during or after wars, when tax revenues were insufficient to cover the costs of servicing the rising debt. The authors describe the 1780s as a severe peacetime fiscal crisis, with high debt service relative to tax revenues, and note that the budget impasse helped lead directly to the collapse of the Assembly of Notables in 1787 and the convocation of the Estates General in 1789.

A large part, about half, of the debt was indeed repaid, but the start of a European conflict in 1792 transformed the assignat into a fiduciary currency before the liquidation was over. It was still accepted for purchases of land, but to pay for the war it was issued in nominal quantities that vastly exceeded the value of the lands, which was its original backing.

The Assembly of Notables in 1787 had been called to address a major fiscal crisis. The failure by the Notables to yield fiscal privileges increased the perception that they were putting their interests above the good of the state, and demand for the convocation of the Estates General grew.

Regardless of defeat or victory, colonial and naval wars were problematic because of their prohibitive cost. In Bourbon France ... a high percentage of the governmental income was earmarked for war. Navies were a particularly costly commodity. The crown’s inability to manage the ever-swelling deficit finally forced it to ask the country’s elites for help... Money thus was a large factor in the collapse of the monarchy in 1789.

France’s intervention in the American Revolution added greatly to the crown’s already serious financial problems. By 1788 the government was virtually bankrupt, and the calling of the Estates-General in 1789 was driven in large part by the fiscal crisis.

The crown’s finances were in a precarious condition in the late 1780s. Heavy war expenditures, especially from the War of the Austrian Succession, the Seven Years’ War, and intervention in the American Revolution, left the monarchy with a crushing debt burden.

French involvement in the Seven Years’ War and the American War of Independence added substantially to the state’s debts. Jacques Necker had largely funded France’s war effort through loans. As a result the state debt ballooned to between 8 and 12 billion livres by 1789, and servicing that debt consumed an increasing share of state revenue.

By the late 1780s, the French monarchy was in serious financial trouble. The costs of war, especially the Seven Years’ War and the American War of Independence, and persistent high spending had left the state burdened with debt and close to insolvency.

Throughout the 18th century, France faced a mounting economic crisis. By 1789 France was broke. The nobility refused to pay more taxes, and the peasants simply could not. King Louis XVI convened the Estates-General to address the crisis.

The French monarchy’s finances were in crisis by the late 1780s. Years of expensive wars, especially support for the American Revolution, combined with a costly court and an inefficient tax system to leave the crown near bankruptcy.

The financial crisis of the French crown played a role in creating the social background to the Revolution, generating widespread anger at the court, and (arguably most importantly) forcing Louis XVI to call the Estates-General. The court was deeply in debt, which, in conjunction with a poor financial system, created a crisis. The French Crown's debt was caused by both individual decisions, such as intervention in the American War of Independence and the Seven Years' War, and underlying issues such as an inadequate taxation system. The War of Independence alone cost 1.3 billion livres, more than double the Crown's annual revenue, and in a single year—1781—227 million livres were spent on the campaign.

France was in a financial crisis in 1789, and the years from the end of the Seven Years’ War up to the storming of the Bastille were financially volatile. Under Calonne, expenditures continued to grow while revenues stagnated, producing an ordinary budget deficit.

In the late 1780s, spending on war brought France to the brink of financial insolvency and bankruptcy. The unequal tax system further enhanced economic instability. In 1788, France's national debt had soared to nearly 4.5 billion livres... In 1788, France was effectively bankrupt, after being unable to generate sufficient revenue to cover costs. By the late 1780s, the national debt had already crossed 4 billion livres... The accumulation of war debts associated with an unfair tax system created an unsatisfactory financial structure that ultimately led to the revolutionary upheaval of 1789.

The crown’s finances were in chronic disorder and in the 1780s the problem reached a critical point. Military expenditure and the servicing of an accumulated war debt absorbed the bulk of royal income. In 1788 nearly half of state revenue went on interest payments alone, while the deficit persisted. It was this crisis of public credit that precipitated the summoning of the Estates-General.

Standard histories of the French Revolution describe a late-1780s fiscal crisis in which the monarchy faced heavy war debts from the Seven Years’ War and especially the American Revolutionary War, alongside high court and state spending, making default or near-bankruptcy a common characterization of the crown’s finances.

Louis supported the American Revolution in 1778, but the Treaty of Paris (1783) yielded the French little, excepting an addition to the country’s enormous debt. With the government deeply in debt, King Louis XVI was forced to permit the radical reforms of Turgot and Malesherbes.

It is widely understood that by the 1780s France was descending into an economic crisis caused by enormous debts and an ineffective tax system. French deputies in 1789 were very eager to avoid bankruptcy because they were personally invested—or at least represented people who were—since their social class was the main creditor group to the French crown. They tried to avoid bankruptcy by raising new taxes, cutting expenses and nationalising church property to use as collateral.