Just saw Clint Eastwood’s recent Iwo Jima movie, “Flags of Our Fathers.” It wants to be the Pacific War’s version of “Saving Private Ryan,” but fails, alas. Jumpy editing, and it’s hard to differentiate between the soldiers, for starters.
In one scene, a Treasury Department official urges three of the survivors of the raising of the flag on Mount Suribachi to sell war bonds as aggressively as they can, because the three previous bond drives had fallen far short of expectations, the U.S. was in dire straits financially due to military spending, and if the current (seventh) war bond drive didn’t succeed, the U.S. would have to pull out of the war within six months and come to terms with Japan.
Yeah, right. I didn’t believe a word of it. Yes, the U.S. did some bigtime deficit spending during WW2, but our financial situation wasn’t nearly that bad, was it? If he was trying to get them fired up to sell bonds, he waaaaaaay overstated his case, I think.
Here are some statistics on the World War II war bond drives. Note the success of each of them. Corporations and banks also bought bonds, in addition to individuals.
If the bond drives had fallen short, we hardly would have given up, shaken hands with Japan, and said “Good game”. The next step would have been compulsory savings. Every last dollar of bank reserves would have had to have been invested in bonds, and individuals and corporations would have gotten part of their payment in such. Fortunately, such extreme steps were never necessary.
The difference between the U.S. and all other countries engaged in major modern wars is that the U.S. came out of the wars in better shape than it went in, rather than being a bankrupt, mentally and materially exhausted nation. (Parenthetically, I’m convinced this has played a major role in other countries’ resentments of the U.S. over the years.)
It’s not much of an exaggeration to say that the U.S. was awash in money by 1945. Because of the lack of consumer goods to buy - plus the enforced rationing - most families had managed to put away large amounts of money in savings as well as into bonds. (There was a huge fear that the spending of their piled-up cash would send the country into a devastating inflation after the war; something that didn’t happen because of the productivity gains the war forced along with a shortage of goods to feed the pent-up consumer hungers.) This was helped by the virtually universal employment that the war brought on along with higher wages in every industrial category. Large manufacturers made enormous profits during the war, and were already planning for a highly profitable return to a civilian economy by 1944.
Not everybody prospered, of course: small manufacturers suffered because government contracts went overwhelmingly to large businesses and consumer goods retailers closed because of lack of goods to sell.
Even so, the economy in 1945 was vastly superior to that in 1940. The bond efforts were easily oversubscribed and more could easily have been taken out of peoples’ pockets. What’s interesting is that the U.S. could have taxed this money but instead borrowed it with promises of good interest returns. No other country could possibly have done this during the war.
In fact, many of our allies were hurting because the U.S. took gold from their reserves as payments for the enormous amount of matériel it sold them to prosecute the war. We had almost all the gold in the world by war’s end. Wealth flowed into the U.S. from the rest of the world. Again, it has to be emphasized: the U.S. was wealthier at the end of the war than at the beginning, and became so at the expense of all the other nations fighting the war. It’s possible that the U.S. was wealthier than the rest of the world combined at war’s end.
It’s hard to imagine today the kind of propaganda the U.S. put out on a daily basis to get the public and the troops to go along with the war, but I cannot imagine anyone seriously saying that the U.S. would have to end the war because it didn’t have enough money to fight.
I hope this is a coherent rant because I’m mentally sputtering at this nonsense. I’m glad you didn’t believe it. It’s the opposite of truth.
The United States was nowhere near bankruptcy at any point in World War II. Some specific revenue programs might have reached their limits but there was plenty of untapped wealth.
The United Kingdom, on the other hand, was pretty close to economic collapse by 1945. It had a smaller economy to start with, had been fighting longer (and by itself for a period), and had suffered much more from enemy attacks.
I could be wrong, but I thought we were supposed to see that the brass was feeding the soldiers a line in the movie in order to get them onboard with the whole thing, which they were a little bit uncomfortable with.
In a lot of ways, Great Britain “lost” the war, they just didn’t admit it. In any case, rationing didn’t end until 1954 - the postwar period was terrible. They even “mined” their silver coinage to pay back the U.S. for war materials, replacing the coins with base metal slugs. The US didn’t do this till the 1960’s.
Welcome to the boards. Beware; many posters are rightfully sticklers for proper spelling and grammar. You may want to run your posts through word first or use a spellchecker of some sort. It also helps to read the Op for content. Elendil’s Heir clearly wrote “Yeah, right. I didn’t believe a word of it.”
I have translated your post into English as a public service
“If you start to believe stuff, you (that) see in movies made in Hollywood you may have problems getting straight facts.”
I’ve heard from some sources that war bond sales were as much about cooling down the domestic economy as they were about financing the war effort.
That is, wartime spending was putting a lot more money in people’s pockets at a time when there wasn’t much in the way of consumer goods available. The result COULD have been massive inflation (which the U.S. did get after the war was over).
By getting people to invest their money in war bonds, rather than spending it, the government took money out of circulation and eased inflation on the home front.
The problem was not that the U.S. was out of money- rather, it was that (for the first time in a long time), many Americans DID have a lot of money.
Truman was in a bit of a pickle after the war, as lots of organized labor wanted to strike, and there was a “meat shortage”; inflation did kick in and caused a lot of political trouble. He was widely considered toast by all the smart money because of it.
Obnviously, War Bonds only pais a small portion of the enormous expenditures…WWII was estimated to have sost (1990 prices) > 11 TRILLION dollars! Did the goverment just print more money? Another question; wars result in a LOT of once very valuable equipment becoming almost worthless 9take a B-25 bomber). So once the war ended, the armed forces had to get rid of enormous amounts of material, which was almost worthless-how was this done? (My uncle (WWII Italian Campaign vet) swears he saw brand new jeeps, tanks dumped into the ocean!
I suppose it depends on your definition of massive.
The consumer price index did rise from 44.1 in 1941 to 77.8 in 1951 (1967=100). The 1967 comparison chart from the Bureau of Labor Statics stops in 1997 at 480.8. The increase from 1978 to 1979 alone, a period when inflation was a real concern, was from 195.4 to 217. 4.
Certainly there was some inflation in the economy after the war, but much more was expected (remember I said “devastating” inflation) and wages caught up with prices in the 1950s economic boom.
On preview I see an 11 trillion figure for WWII. Very high. Coincindentally, an article by Richard Wolf in USA Today gave inflation-adjusted figured for all our wars just the other day.
Tax revenues were an inflation adjusted $500 bilion in 1945. The war loans brought in even more that year. War expenses were easily covered. No printing of money was needed. As I said before, the U.S. was swimming in money.
