Lets discuss economic history and the times where government deficits have skyrocketed and then come back under control. ‪@belangp‬ posed this question in his latest video Incentives to change part 1. We use economic history to see the times in US History when we saw economic deficits come back down to more normal or lower levels. The main times we see this between 1900 and 2000 are after world War 1 and 2 and then during the 1990s. After both of the world wars we saw an increase in population and productivity in the country that drove a ton of economic growth. This growth led the government to be able to collect more tax revenues than previously and thus reduce our deficits each year after. During the 1990s we saw a different reduction in deficits caused by a technological boom and bipartisan support of lowering the national debt. The results of these bipartisan efforts were increased taxes while limiting spending.
In a future video, I want to look closer into is the national deficits after 2000 and also how the gold price was changed by these deficits over time.