December 7, 1941 and September 1, 2001

[45Auto]

For the history buffs and those who like to think outside the box:

What would have been the result if we made the same economic choices following 12/1/41 as we did following 9/1/01?

Our modern assumptions about low taxes, deregulation and small government sound good. But would we have been able to win WWII that way?

[armedandsafe]

When you say "following 9/1/01?" do you mean 9/11/2001?

Pops

[millwright]

I'm glad we didn't, 45A......

We won WW2 by relying upon "small government/low taxes/private industry" productivity and development. We built ships in a week ! We built good tanks by the thousands ! We built good combat aircraft by the tens of thousands.....

Yes, we did see some specific tax increases, (mostly in luxury goods), but a vast amount of our war spending was financed through War Bonds. Add to that revenue stream huge upsurges in the taxable income base due to an increase in the labor pool as - most significantly women and rural black populations were recruited to fill vacancies created by the draft - added to the IRS revenue stream. FWIW, we were still "paying off" those War Bonds in the Sixties.......

BTW, economic performace increases adversely tracking taxes, isn't an "assumption". Its demonstrated fact ! Taxes are governments' means of populace control without direct confrontation ! >MW

[45Auto]

It's easy enough to check the historical record regarding what the U.S. Govt. did and did not do in WWII.

First, taxes in WWII went through the roof! For wealthy Americans the top income tax rate in WWII was as high as 91%. (Imagine a rich CEO taking home only 9% of his income.) For another example of tax history, America began income tax withholding in WWII for wages. I think you get the point, lots of tax increases.

In WWII, the U.S. Govt. had extreme controle of the economy through new laws and new agencies like the Office of Wage and Price Administration. Gasoline, tires, sugar, etc. all rationed. The prosecution of war profitiers was also in full swing. To do all of these things, the size of the U.S. Govt was bigger than it had ever been before.

For some reason, Americans loved their Uncle Sam (The U.S. Government). Americans paid those high taxes and even bought War Bonds with what they had left over. We had a greater feeling of unity and common sacrifice for a higher purpose.

Now that some historical high points of the American Govt. of WWII are in place, let me ask the question in a different way: Could we have beaten Hitler and Tojo if we had tax breaks, small government, and deregulation on the home front?

[jbmid1]

Actually 45, These were both actual crisis, not the kind that our current govt. likes to contrive to see how much mileage they can get out them. Rahm Emanuel's "don't let a crisis go to waste" concept. They were both
real and the country made some drastic measures. There were more similiraties than differences in the economic arena, so, your original question makes no sense. 9-11 was not a catalyst for lower taxes and deregulation.
The govt. grew in both cases.

Some of the differences:

In WWII the entire country mobilized for war; Govt, industry, civil defense.
Post 9-11, Our secdef Robert Gates at one time remarked that not only is the country as a whole not on a wartime footing, niether is the Department of Defense.

In WWII we were allowed to identify our enemies by nationality/ethnicity. Japanese Americans were rounded up and moved to internment camps.
Post 9-11 we were encouraged to sing kum-ba-ya with our moslem brothers and encourage more of them to move to America.

In WWII we created massively destructive munitions and used them as we chose.
Post 9-11 we let hostile countries help determine our rules of engagement, and put our own soldiers in prison if they should fail to comply.

The larger govt. post 9-11 did make life more difficult for most of us in America. It's a lot less fun to fly than it was before, and even when I go on deployment I have to go to a lot of excessive lengths to prove I'm not a terrorist.

So, thanks for opening up this can of worms 45. I'm sure there will be others with even more to add.

[ofitg]

http://www.usgovernmentspending.com/...ize=l&title=US Federal Debt As Percent Of GDP&state=US&color=c&local=s

[jbmid1]

Good Graphic ofitg;

Most wars are fought with deficit spending. WWII was no exception. So, high vs low taxes is really a non-issue. It's interesting, looking at the right side of the chart though, you don't see a major increase in the debt recently until around 2008.

[carver]

I would like to see the chart show us the spending up to today!

[ofitg]

Three thoughts occurred to me when I saw this graph....

1) We presently have WW2-level debt, but we can't blame it on Hitler and Tojo.

2) We were able to pay down our debt after WW2, mainly because we were the only major power in the world to emerge from the war with our infrastructure/industrial base intact. We don't have that advantage now.

3) I don't know what we would do if an all-out global war started now - our credit card is already maxxed out.

[jbmid1]

International bankers are always willing to loan money to profit off of wars.

[45Auto]

Nine years into the "war on terror" and we have WWII level debt. How come? Could it be that:

. We failed to enter into a war economy after 9-11 and still fail to do so today.

. we failed to set taxes at war time levels (we gave out tax brakes instead).

. we failed to regulate financial insitutions as part of a responsible war economy.

. we failed to go after war profiteers and root out corruption.

. we call our Govt. "the beast" rather than "Uncle Sam." Loyalty is a thing of the past.

. Americans seem to hate each other more than the enamy. The disloyalty to our presidents (W. Bush and Obama) has been so bad the Islamic brotherhood must love it.

In WWII, the American people ran the economy like smart and responsible Patriots should run a war economy. I wish I could say the same for us today.

To be honest, we no longer have the money to continue in Iraq and Afganistan, and yet we want more tax cuts? So much for the war on terror, what about the next war?

In real terms, we have already lost the next war. The Chinese Communists have passed us in technology, education and in their economy. They have our jobs and they own us.

How do we turn this around?

[ofitg]

According to what I've read, the total costs of the Iraq War and the Afghan War have been 1.1 trillion dollars (since 9/11/2001).

Since 9/11/2001, our national debt has increased from 5.8 trillion to 14.1 trillion.... so the "War on Terror" has only accounted for one-eighth of the new debt.

[CampingJosh]

Originally Posted by 45Auto

Nine years into the "war on terror" and we have WWII level debt. How come?

Well, just like WWII, we've fighting a war on two fronts. We only spent four years in WWII; we're already nine into this "War on Terror."

Your complaints don't seem to hold up. We've been fighting a war for twice as long only to run up the same (proportionate) debt.

. we call our Govt. "the beast" rather than "Uncle Sam." Loyalty is a thing of the past.

There is a difference between loyalty and blind following. All those "loyal" citizens from the WWII era were encouraged to do horrifically racist things to other Americans.

We can disagree on details--and perhaps even some foundational issues--without being disloyal to the nation.

[45Auto]

Originally Posted by ofitg

According to what I've read, the total costs of the Iraq War and the Afghan War have been 1.1 trillion dollars (since 9/11/2001).

Since 9/11/2001, our national debt has increased from 5.8 trillion to 14.1 trillion.... so the "War on Terror" has only accounted for one-eighth of the new debt.

The costs allocated directly to the boots on the ground in the "War on Terror" changes depending upon who you ask, what's included and what's not.

The important thing to remember is that modern war is fought on many levels: Perception, moral, economic, etc. The Islamists are in this for the long run. If we wreck our economy and down size our govt. (exporting jobs + tax cuts) we become week, we can't afford to fight and the enamy wins.

[carver]

We are not at War with anyone! What we are doing is called a Police Action, not war. It is imposible to fight a War on Terror. Terror is a tatic, not an enemy.

[RunningOnMT]

I wonder how much of the cost attributed to the GWOT would be necessary anyway just to maintain the military. It seems when figures are quoted they are for total defense spending.

One thing about comparing our economy today with the WWII era is that today we have so much more allocated to social programs and entitlements than we did back then, so any increase at all puts a squeeze on the budget.

There might be more for defense, which is one of the few constitutional responsibilities of the federal government, if they weren't spending so much trying to manage every facet of our lives.

I have to say that after having been a strong supporter of the war on both fronts, I am beginning to look at things differently. I think it's time to do some serious soul searching and ask if these military operations are really necessary for the security of ourselves and our allies. We invest so much in dollars and human life fighting wars overseas yet fail to properly protect our borders from foreign invasion. We need to stop with this nation building, stay home and "build" our economy and our infrastructure instead.

Better security measures would likely do at least as much good as the GWOT has to this point. Force these muslim coutries to root out the terrorists in their midst by putting them on notice that we will respond to any future attack planned or originating from within their borders as acts of war, that will receive a swift and harsh response from us. The ICBM could be our best tool for the restoration of a prosperous free world.

[ofitg]

The last I heard, the gov't was borrowing 40 cents for every dollar that it spends, and the numbers show that our economic weakness is largely because of reckless domestic spending. I think this is why so many people are upset with the federal gov't. There is a dire need to pay down that $14 trillion debt, and the politicos don't have the guts to do it.

Other factors come to mind - it seems insane (to me, at least) that we have exported so many jobs, allowing our own industrial base to crumble. That weakens us even more.

As 45Auto mentioned, the whole country pulled together during WW2, and it might take a similar effort now just to put our house back into order. Everybody would make some sacrifice. Federal spending needs to come down, and federal revenues need to go up (that probably means higher taxes).

[jbmid1]

Good point OFTIG.
The reckless domestic spendidg is the biggest problem now. Obama and his cohorts have already spent trillions while Congress argues over a thousand here, a thousand there. It will take a lot of us working together to bring things back into order.

[al45lc]

Some misconceptions, at it's peak, production of war goods in WWII comprised only 40% of the U.S. economy. Hardly the entire country.
The tax burden on the average american was 21% in 1944, it's peak.
These according to the Economic History Assoc.

[ofitg]

I think we face a lot of problems - the economy is a big one - and the people who caused most of those problems are right here in the U.S.

They're playing the U.S. public like a fiddle.

[45Auto]

Originally Posted by ofitg

I think we face a lot of problems - the economy is a big one - and the people who caused most of those problems are right here in the U.S.

They're playing the U.S. public like a fiddle.

I could not agree more. They play us like a fiddle and they know the toons we want to hear.

For generations, U.S. consumers have long been the subjects of behavioral studies and research by advertizing corporations. They track each market and sub-market of consumers. The carefully researched techniques used to sell junk food are also used to sell junk political ideas.

They don't care what you as an individual are thinking, but they know group dynamics inside and out.

[lentz]

there is no war on terror. when was the last time you were terrorized?

[Double D]

Originally Posted by lentz

there is no war on terror. when was the last time you were terrorized?

?? Without the war on terror, you could answer that question.

[Gun Geezer]

I just wonder what the effect it would have had on the war effort if we had the modern day unions back then?

[45Auto]

The Unions have only a fraction of the power they once had. It may have wrecked the economy, but outsourcing U.S. jobs and U.S. industries to communist China stripped the unions of members and cash. Of course, many non-union jobs also were outsourced, but that's another story.

At any rate, the Unions are not dead but they are not the threat they used to be.