The "war on terror", like the "war on drugs", is a misnomer though; it's not really a war (although a couple of wars were waged as part of it, or alongside it).
Edit: And WW2 saw another massive increase of the "state", so not sure war does generally shrink administrative systems.
As a winner, though, you face the task of trying to shrink an administrative system that just won a war.
They had a very small-scale civil war which made them rethink their political structure.
Or the Austrian empire in 1866, which lost a major war against Prussia and was forced to reform itself into a dual Austro-Hungarian monarchy. Which was somewhat more competitive and liberal than its predecessor and if it avoided other wars, it might in some form survive until today.
However if the present legislative burden is excessively oppressive, a war, revolution, or reconstitution might address same.
Your argument is a non sequitur.
(*) a quick read of a wikipedia article about the Japanese economic miracle - which undoubtedly you'll consider leftist propaganda - certainly confirms this. At best relaxing anti-monopoly laws was an example of legislation reform that helped further boost the already impressive recovery that had occurred during the 50s.
FWIW I would actually expect the fact that because the priority at the time was economic recovery before everything else, red tape wasn't allowed to get in the way to the degree it often seems to once prosperity had been restored. I'd even say that's probably a reasonable trade off, though it certainly doesn't justify governments letting growing businesses get away with whatever they feel like. Nobody likes bureaucracy or red tape, but almost always it's what we end up with as a result of repeated cases of corporate behaviour that's widely agreed to be unacceptable.
Leftists always mis-attribute the causes of prosperity. The wikipedia article cites causes that are commonplace in other countries that had no miracle.
https://en.wikipedia.org/wiki/Japanese_economic_miracle
Leftist economies have never experienced an economic miracle in any country.
East Germany, for example (compared with West Germany).
But you haven't made any sort of case that the German or Japanese "miracles" were largely due to raw unrestrained capitalism. There are way too many factors that made those particular countries special cases at the time to pinpoint all the primary causes, let alone tease out various secondary factors some of which probably tempered rather than accelerated growth.
Edit: It's fine to make broad claims about free market and growth, but please provide some citations to back up sweeping statements (and also to allow to go deeper into definitions).
Communist economies always wind up facing famine.
Communist China, for example, switched from a communist economy to a free market one. Look at the results. Korea split in two, one communist, one free market. Which one prospered? East vs West Germany, same story.
The US tried central economic planning for gasoline in the 1970's (repealed by Reagan as his first EO). Disaster. The US tried central economic planning for airline routes, fares, and schedules up until Reagan ended that. The result was a huge increase in efficiency and low fares.