There certainly are allot of these anti fiat posts popping up all over the internet. Fiat system is essential to a modern financial system, does anyone actually believe deep down that living standards would be higher with a non fiat system?
It would be constrained.
The "modern financial system" is where the problem lies. It has been very good at fuelling consumption and leaving the bill for tomorrow. It, combined with other things directly associated with it, has also been very good at harming actual production of goods in developed economies.
It would indeed be constrained. We would have to live within our means, rather than building up a mountain of IOU's for the next generation to worry about.
The USA is the ultimate case in point.
Yesterday's major world power in every way,
today's increasingly fragile society at the mercy of others. In 1970 before all this started, the US called the shots on just about everything. In 2010, the US lives in hope that the "developing" world doesn't call in the debt collectors.
Fiat may not be the "cause", just like oil on the road does not "cause" a traffic accident. But it has been a very key aid in the whole process.
If you put money in a generic US stock market investment a decade ago then, after inflation, you've gone backwards. Those who invested in gold or just about any other tangible asset back then will be smiling however.