While explaining the economic reality of the Confederacy in times of the Civil War, some fundamentals on the financial strategies of the Confederate and Union governments must be considered. One of the major points, which is to be taken into account, is the Confederacy’s inflation financing. Thus, one is to keep in mind that there is a direct interdependence between the economic strategies of the Confederacy and their military failure. On the other hand, effective financial choices of the Union are mostly associated with the so-called policy of combination . In other words, summing up loans, taxes and notes determined the success of Union governments’ military engagements. The Thesis Statement The analysis of the economic policy of the Confederacy in times of the Civil War gives us an opportunity to understand how the government’s ability to secure resources to mobilize military forces influences the success of military engagement. The Body Raising Funds As The Government’s Most Important Step To Succeed As far as Southerners’ economic choices were mostly conditional, one can probably conclude that the major mistake of the Confederacy was that they failed in aggrandizement of federal power, when such opportunity was available. Taking into account the fact that the Confederate governments were mostly focused on states’ rights and slavery, one can suppose that their financial strategies were not static. It seems to be obvious that the government’s ability to raise funds, in order to support military strategies development as well as to reinforce administrative capabilities is extremely important for the war effort. Of course, political incentives cannot be neglected, as they also influence financial choices. The Economic Choices Of The Confederacy And The Union The political basis of the Confederacy and the Union concerning war financing gives us an opportunity to trace back the interdependence between economic choices and military outcomes. One of the most important issues, which cannot be ignored, is that “the key decision-makers on both sides knew each other well from previous experience in Washington; and the military and financial strategies that had been employed throughout the ante-bellum period were common knowledge” (Razaghian 2). In other words, one can make a conclusion that the economic policies of the both sides had to be somewhat similar. In reality, the assumption, however, does not make any sense. It is necessary to remember that the success of the Union can be explained by the government’s right decision to adopt long-term financial strategies. The Confederacy, in their turn, lost time in effortless contemplation. It is a well-known fact that the Confederate government decided to leverage tax power, when such actions were not already necessary. According to Razaghian, the major mistake of the Confederacy was that “they relied on loans and non-interest bearing notes” (3), while the success of the North can be explained by its government’s decision to collect taxes. The Importance Of The Key Political Interpretations Generally, there are many opinions on the reasons of the Confederacy’s failure. For instance, the viewpoint that “the Confederacy lost because of disagreements between Jeffersonian governors and an increasi