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Comment by JoshTriplett | Hacker News Reader

Yup. Notice the similar spike around World War I. Also notice that the spike went back down fairly soon after World War I, but after World War II they pretty much stayed at the increased level; rather than decreasing spending and taxes back to pre-war levels, the government just found other ways to spend it and continue growing.

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"rather than decreasing spending and taxes back to pre-war levels, the government just found other ways to spend it and continue growing."

Well golly, let's not let facts get in the way of a good story. The federal government had a huge debt to pay down after the war. The debt as a fraction of GDP spiked to an all-time high after WWII, and steadily declined until the late 70s. The higher taxes were going toward that debt.

Then we dramatically cut taxes in the late 70s, and the debt started climbing again.

http://en.wikipedia.org/wiki/United_States_public_debt

That may be true--I'd like to know what specific tax cuts you're referring to. It also looks like it was the 80's when the debt really started growing, according to the numbers in that article. It's true that government spending (as % of GDP) never went back to pre-war levels, and has continued to increase: http://en.wikipedia.org/wiki/Government_spending#United_Stat...

I'm referrig to the massive drop in all tax rates starting around 1979(which are clearly visible in the chart on the page that this comment thread is discussing.)

> The federal government had a huge debt to pay down after the war.

Granted, but if spending had otherwise returned to the previous levels then that debt would have gone away entirely and then the new taxes along with it. That rather obviously didn't happen. :)

A now-deleted sibling comment linked to the corresponding spending levels, which confirm the continued spending (note that this graph doesn't even include the debt): https://upload.wikimedia.org/wikipedia/en/0/05/Us_gov_spendi...

Among other things, the government was building the free interstate highway system and a shitload of free public schools for the baby boom generation.

I suspect neither of those was anywhere near as expensive as funding the Cold War.

We were still at war, son. The Cold War, gotta prove Capitalism can outspend those pinko commies. Marshall Plan et all.

Well at least they spent some of it on going to the moon and sending stuff to Mars.

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