Keynesian Myths, Monetary Central Planning and The Triumph of The Warfare State – Part 5

The national debt did soar from less than 50 percent of GDP.... to nearly 120 percent at the 1945 peak. But this was not your Krugman’s benign debt ratio. Instead, the 1945 ratio was an artifact of a command and control war economy which had banished civilian goods including new cars, houses and most consumer durables, and tightly rationed everything else including sugar, butter, meat, tires, shoes, shirts, bicycles, peanut brittle and candied yams. With retail shelves empty the household savings rate soared from 4 percent in 1938-1939 to an astounding 35 percent of disposable income...
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