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I recall reading somewhere that the expenses of the war were ruinous for France and that the gains didn't offset them, this being one of the causes that forced Louis XVI to convene the Estates General (and what ensued is well-known).

Is it true? Did the American Revolution ruin France's already unhealthy finances? Was is a the proverbial straw that broke the camel's back or was it just a drop in an ocean of debt that had no overall impact on the French budget?

(this is partly inspired by this question).

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From Wikipedia –

In all the French spent 1.3 billion livres to support the Americans directly, in addition to the money it spent fighting Britain on land and sea outside the U.S.

France's status as a great modern power was affirmed by the war, but it was detrimental to the country’s finances. Even though France's European territories were not affected, victory in a war against Britain with battles like the decisive siege of Yorktown in 1781 had a large financial cost which severely degraded fragile finances and increased the national debt. France gained little except that it weakened its main strategic enemy and gained a new, fast-growing ally that could become a welcome trading partner. However, the trade never materialized, and in 1793 the U.S. proclaimed its neutrality in the war between Britain and France. Most historians argue that France primarily sought revenge against Britain for the loss of territory in America in the Treaty of Paris. However, Dull, in 1975, argued that France intervened because of dispassionate calculation, not because of Anglophobia or a desire to avenge the loss of Canada.

Wiki Source

It was just another contributing factor that led up to the French Revolution so it's worth researching the causes of that as well. Ironic that France in trying to weaken her old enemy Britain actually contributed to the downfall of her own monarchy.

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But do we know what was the annual budget then? Was the actual effect of spending the 1.3 billion livres? Perhaps some of it was debt-financed? I mean, that's a good start, but I am still not sure about the original question. –  Felix Goldberg Dec 31 '12 at 14:11
@FelixGoldberg I agree it needs more research, but there are a number of factors in play here. France's finances were already bad from fighting the seven years war, from rebuilding its destroyed Navy, from having a very poor tax collection ability etc. The losses incurred from the American War merely added to an already bad debt situation for them, which contributed to high inflation and ultimately the French Revolution. –  spiceyokooko Dec 31 '12 at 14:15
I upvoted the answer, I just want to know about it in more depth. –  Felix Goldberg Dec 31 '12 at 14:25
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