Yes, the situation in France was already disastrous before their involvement in the ARW after decades of excessive spending by Louis XIV and Louis XV (Louis XIV left France in 60 million livres of debt on his death) and repeated 'failures' of France in almost every war since the War of Spanish Succession. Louis XVI's inability to reform French society, thanks to his indecisive nature and lack of political judgement compounded the issues and the ARW, which was financed largely through Necker taking out loans, only made it worse. Despite this, however, the ongoing economic failures and Louis XVI's effort at reform had already doomed the Ancien Regime as, not only was Louis unable to pass his reforms, his efforts to do so undermined his support from the nobles, whose rights and privileges he was attempting to erode when he was supposed to uphold them, and his inability to carry out the reforms undermined his support from the rest of society. The result was that a revolution or rebellion of some sort was inevitable, when and how was open. It is also worth noting that said rebellion/revolution would likely have not been republican (since the success of the USA was the first time any large state had been run as a republic) but rather have been focussed on reforming the monarchy.