I have a little feeling here. Just a suspicion.
That a goodly chunk of the fall in the national debt post WWII was to do with screwing over those who held the gilts which made up the national debt.
The best way, if you can manage it that is, of getting the government out of debt is for the government to inflate it away.
And my suspicion is that that is exactly what they did.
The chart and figures for the national debt as a percentage of GDP are easy enough to find. And they do drop from over 250% of GDP in 1950 for the next few decades.
It\’s also not all that difficult to find the inflation rate for those years.
But the next bit might be difficult to find: what was the yield on gilts over those years? My suspicion is that the interest rate was less than the inflation rate for some/many/all those years. And that that is the minor/part of/major reason why debt fell as a %ge of GDP.
I sorta assume that someone has already done this calculation: hopefully they have at least for it\’s certainly beyond my abilities.
There is of course a current point to make: if I\’m right, and the reduction in debt was largely a result of a slow motion shakedown of investors, we can\’t run this trick again. Partly because a huge portion of our debt is now inflation protected and partly because the markets have woken up to such inflating out of debt and thus long term rates would/will rise on new issuance and rollovers as inflation climbs.
So, anyone know whether this work has been done and if not, anyone want to do it?