"There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt." John Adams, 1826
Civilizations have historically fallen by the same formula: politicians and bankers conspire to form a central bank, which prints money and artificially expands the monetary supply. Politicians benefit from the arrangement, because they receive funds for their campaigns and the ability to distribute funds to their voting or any other favored constituency. The bankers benefit from the arrangement, because their counterfeiting scheme (the monetization of debt; a monopoly on money) is politically protected. The banks are thus permitted to make loans to domestic and foreign governments, collecting indefinite interest, because everyone (the bankers and politicians) knows these loans will never be repaid. Repaying means raising taxes, and politicians can only raise taxes so high before they're thrown out of office.
Inflation results as a consequence of monetary expansion. The more finite a material is, the more value it retains. Thus, value declines as the monetary supply expands. Therefore, inflation is nothing more the devaluation of the monetary unit. At this stage, the mother country enters an imperialistic phase, conquering other nations to transfer wealth back to the mother country and (temporarily) offset the devaluation of its currency.
So how does this apply to The Old Republic and the Clone Wars?
Bankers make loans to developing governments in the Mid Rim, knowing these loans will never be repaid and thus permitting bankers to collect indefinite interest. A form of perpetual slavery is created on these remote worlds... the governments can only raise taxes so high, so only the interest can be paid on these loans. And because the people are continually being taxed, money cannot be saved and invested in proper economic development.
Eventually, the Mid Rim people wise up to governmental corruption and revolts begin. If these revolts prove successful, the bankers will lose their perpetual income when the Mid Rim territories declare bankruptcy, liquidate debt, and start a new. The bankers have all the motivation in the world to aid the foreign governments against the revolutionaries.
The bankers attack the situation two ways. The first plan involves lending money to more of the Mid Rim governments, only for the purpose of creating clone armies. As a condition of the loan, the clone armies must invade the Mid Rim planets in revolt and establish a military occupation. The establishment of military bases guarantees interest payments for the bankers and a continuation of their fiscal scheme.
The bankers' second plan is to infiltrate the government of the Old Republic by funding corrupt political candidates. After obtaining office, these candidates approve various and incremental policies of foreign aggression and domestic protectionism. As the Republic grows corrupt, the Jedi condemn military intervention - an act of aggression born from fear and anger - and refuse to participate. Many Jedi colonize new worlds, which are meant to exemplify civilization and productivity. They are to be a stark contrast to the corrupting influences that have seized the Republic. Hopefully, other Republic worlds will grow to mimic the Jedi colonies.
As the first imperial wars erupt, other solar systems want clone armies for their own protection. An arms race begins where the armies tend to be used for foreign aggression as opposed to domestic defense.
While numerous solar systems within the Republic have nullified attempts to raise a clone army, they have failed to prevent the bankers from controlling the monetary supply. Such control has led not only to the Clone Wars, but to monetary devaluation in the Republic. Governments are in extreme debt.
When the bankers succeed in creating a central bank for the Republic, under the guise of banking reform, numerous planets secede from the Republic, threatened by perpetual debt. The hope is to decentralize the federal government and restore local autonomy, which has gradually been eroded by the centralist bankers and politicians. The bankers and politicians, hoping to retain power, claim false charges against the secessionists - that clones have infiltrated the secessionist governments and are trying to destroy the Republic. At this point, the Republic is a euphemism for the Galactic Empire.