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>>/28005/ > even planned economy works just fine if you don't have to compete in arms race, nuclear race, space race, whatever race. Of course a hermit kingdom like North Korea can be stable. It can't be efficient because of the calculation problem and other inescapable reasons. Budgets The Reich dealt with funding of two kinds: safe, from taxation and long-term borrowing, and risky (for inflation, debt and so on) from short-term borrowing and money creation. Taxation was, by the late 30s, the heaviest in Europe. Of note were taxes on Jews, taxes on imported oil, a part of the autarky programme, and the elimination of the car tax. Long-term borrowing came from retained business profits and household profits in the banks. This money was also used by private investors and so measures were taken to ensure more of it went to the state, with banks being pressured to invest in government bonds and private construction constrained by a ban on new mortgage borrowing in autumn 1938. More funds were made available to Berlin by taking resources from local governments. Hitler had promised to rationalize the relationship between central and local government and did so by centralizing public finance. Off-budget IOUs helped fund rearmament and the Battle for Work. Safe funding was enough at first. Then it failed to keep up with surging spending and the Reich increasingly had to rely on unsafe funding, with the threat of inflation appearing. An emergency measure was the New Finance Plan of March 1939, which forced the Reich’s suppliers to accept 40% of their payment in credits with promises of tax exemption, but the problem as a whole was not solved. Short-term credit had to be taken, which amounted to printing money, and the volume of money in circulation doubled in the two years before the war.