Deficit Spending, Inflation, and GDP Growth During Wartime in the US

Deficit Spending, Inflation, and GDP Growth During Wartime in the US

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.

https://youtube.com/shorts/zAK9Aw6Sq00?si=L9yadmfIUFJ7Y7US

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