"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.