> For instance, at the end of WWII we did not have the federal highway system but the nation is much better off for that on-going expenditure.
The federal highway budget is $60 billion. It probably isn't spending the money particularly efficiently, but it's also only 1% of the federal budget.
> Most government interaction is now possible online which requires expensive staff and infra to maintain, but is certainly an improvement over having to do everything in person.
Shouldn't this result in lower costs? You need a $100,000 system administrator instead of two dozen $40,000 clerks, but that doesn't sum to a larger number.
> And to use your direct comparison, can you imagine what the data would look like if the US economy actually pivoted to a war footing with the existential urgency akin to that during WWII (which was vastly more expensive than WWI even)?
It's not obvious that it would dramatically change, because the US already maintains an enormous standing army, and much of the other expenditures are in the nature of assistance for low income people, which would be displaced by those people getting drafted into the war, or obviated because they're meant to offset e.g. high rents, which would decline with local demand if 10% of the population left the continent to go fight in a foreign land.