We discuss how the US shifted from deficit spending to tax-based financing to reduce its debt-to-GDP ratio, and how inflation was due to past deficit spending. The Vietnam War was cheaper than World War II and the Korean War, with military spending below 9.5% of GDP and funded by higher taxes instead of deficit spending. Public spending did not grow substantially, so the growth of government spending during the Korean War did not lead to a decline in consumption or investment levels in the American economy. The GDP growth rate reached a peak during the war, reaching around 7.3% in 1966.
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