Similarly with the general debt (merely put, all of the borrowings over time added up). It’s risen – to 99.7% of the scale of the financial system as measured by gross home product, its highest on that measure since 1961. But you then look additional again and realise public debt was bigger than the scale of the financial system for 40 of the final 100 years. Given that the pandemic has put the financial system on one thing like a struggle footing, it is value noting that after World War Two, it was 2.5 instances the scale. The response of the federal government then was to not reduce spending, however to embark on the largest growth of state spending in historical past. Sixteen years later, in 1961, prosperity was safe, taxes rolled in and each borrowing and debt dropped quickly.
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