...Let's start with first principles: for as long as anyone can remember, politicians have sought to spend more than they can afford. Since the invention of money they have discovered ever more ingenious ways to do so.Read the rest here.
The initial method involved debasing the currency. Henry VIII earned his nickname "Old Coppernose" because he added so much copper to what were supposed to be silver coins that eventually it would show through on the nose of his portrait.
These bouts of debasement typically end in disaster, as faith is lost in the currency, inflation shoots through the roof and the economy collapses, after which politicians introduce a new, more credible system.
After trust evaporated in gold and silver coinage, we had the gold standard and then the Bretton Woods system and now, today, fiat money – but the routine is painfully familiar. The main difference with fiat money is that whereas under the gold standard it was all too obvious when politicians were spending beyond their means (they would simply run out of gold reserves), these days it is slightly more difficult to tell quite how close the system is to breakage.