Each new wave of panic created more worldwide unemployment as the situation worsened. Then, in the 1930s, the New Deal brought stiff government controls and more people on welfare or on the government’s payroll.
The government first attempted to fund the increase in money by confiscating private stocks of gold and reissuing paper money. When that was exhausted, the treasury began printing credit-money for the first time (known in monetary circles as “funny money”). This new credit expanded the money supply, but without restoring something with sound value. During this period the national debt was established.
During the 1940s and World War II, the great national debt was firmly entrenched. Additional capital was created to fund the war effort, while products were consumed by the billions of tons.