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Financing WWII

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Al Jassas View Drop Down
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  Quote Al Jassas Quote  Post ReplyReply Direct Link To This Post Topic: Financing WWII
    Posted: 24-Oct-2008 at 15:22
Hello to you all
 
 
I think that now with the financial crisis at hand a serious question has arised in my head. Several months ago I saw Flags of our fathers and if the film is correct the US was on the bank of bankruptcy and desperatly needed mony from war bonds to continue the fight. Now I know about special war budgets and high taxes as well as war bonds, but how much exactly was spent on the war and where did the money come from and of course how did the government pay all that debt?
 
Finding sources is hard on this issue but I would appreciate some links or books.
 
Thank you
 
AL-Jassas
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bagelofdoom View Drop Down
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  Quote bagelofdoom Quote  Post ReplyReply Direct Link To This Post Posted: 28-Oct-2008 at 18:41
Short answer: we borrowed it.  The public debt of the US as a percentage of GDP was greater coming out of WWII than it is even now.  The debt was relatively easy to pay off because the US went through massive growth during WWII (15% annually) and was pretty much the only industrial exporter in the world after the war.  Everyone else had been devastated by the war, and as a result, we had 50% of the world's industrial capability.  
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gcle2003 View Drop Down
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  Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 29-Oct-2008 at 12:14
There are to some extent two questions here, one being how was activity within then country paid for, and the other how were imported weaponry and services paid for.
 
In totalitarian societies the first becomes somewhat immaterial, since it only means printing money that people are forced to accept. It's somewhat more complicated in democratic societies, though a wartime command economy has much in common with totalitartian regimes, including, e.g. forcing price controls and rationing.
 
How foreign countries are paid off is different, because you need either assets abroad to sell or as collateral for loans, which Britain had plenty of at least in the beginning, which was one of its big advantages as against Germany, which despite Schacht's best efforts had very few assets abroad, and relied on getting other countries to accept German paper.
 
It's a biggish subject however, and offhand I can't think of a good source.
 
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  Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: 30-Oct-2008 at 13:08

The war bankrupted Britain and nearly did the same to the US. The US paid for it essentially by issueing debt (i.e war bonds).

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