Why didn’t USA experience huge inflation after giving USSR huge aid during WW2 and aiding Western Europe through Marshall Plan?
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Why would it? If anything, giving help to another country causes deflation.
Inflation at it’s most basic form, happens when there is more money than goods and services to spend it on. If the government has 1 billion dollars and it gives it to the USSR, it means that they will invest 1 billion less in say, roads. Road-building contractors will either have to charge less or not work.
Now, inflation is demonized and pictured as undesirable, but you need a little bit of inflation for an economy to grow.
The help they gave also came with a lot of strings attached, overtly or not. You give West Germany a billion dollars to rebuild? Where are they going to buy steel, cars, canned goods and other manufactured items when the vast majority of the existing factories are in the US? Now, this would actually cause inflation, but it balanced with the fact that the money inputted was also outputted.
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