A very good analysis and I agree with you on most but I think there is a way "a population would ever tolerate the taxation necessary to fund those wars." Of course WWII was financed by inflation but also by massive taxation. 1942 Roosevelt said: "At a time of grave national danger no American citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year." And although he never got his 100% taxes the top rate reached 94% in 1944. So I think that an even more indoctrinated population would be fine with 100%.
Of course the money would be limited without fiat currency so that this 94% or 100% would be the whole war budget but wars would still be possible like they were possible when gold and silver were the only money. So although there would be less wars and the wars wouldn't be as bloody as they could be but the wars won't stop and they would still be bloody like the 30-years war or the Napoleonic war.