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H OW the war is financed is of close personal interest to every tax- payer and citizen. Good finance measures can help speed victory and secure the Four Freedoms. It is the purpose of this booklet to provide concise reference infor- mation to aid those who want to study or discuss the various aspects of War Finance. Questions and Answers on War Financing PATRIOTISM is a good basis for buying war bonds; but patriotism plus an understanding of the ele- ments of war finance is a better basis. Informed bond owners aren’t fooled by Axis-inspired rumors — and are much more likely to hold their bonds, both now and during re-conversion. John Q. Public never used to con- cern himself much with “economics.~~ He wasn’t interested. Now, how- ever, he is. Every aspect of war financing affects the value of his earnings, the value of his savings, the amount of his taxes, and our chances for early victory, a lasting peace and postwar jobs for all. The following basic facts and dis- cussion questions are suggested for use at forums, quiz contests, debates, round-tables, luncheon meetings, ra dio interviews, and social studies classes. Some of the topics may sug- gest subjects for newspaper edi- torials and features. How much can we afford to spend for war? The United Nations have been fighting for their rights to continue to exist. “Tell us what you need, and we’ll vote the money” was Congress mes- sage to the Armed Forces in 1941. “If you can get it produced, we can get it paid for somehow,” was the Treasury Department’s promise to the President. The formula was simply: (1) Cut out every non-essential activity. Get every acre, every mine, every piece of machinery, and every worker producing to the limit. (2) Set aside just enough to feed and clothe the home-front. (3) Send the rest to war. Pay whatever it costs. How to raise $100,000,000,000 $100 billions a year seems to represent about the limit of our abil- ity to produce for war. It has been said that what we can produce we can somehow pay for. But how? Here’s the present plan: Uncle Sam needs this fiscal year---$99,000,000,000 He will raise through taxes ---$46,000,000,000 He will have to meet a deficit of $53,000,000,000 It is sometimes said that borrow- ing enables us to postpone part of the cost of the war. This is mislead- ing. If we could get weapons on credit from another country or an- other planet, we might indeed post- pone part of the cost of the war. But as it is, all we postpone is the task of dividing up the cost of the war— deciding who pays how much. Objectives of present war finance The following principles are basic to any sound War Finance Program: (1) Our normal domestic economy should be kept running smoothly, and war industries in particular should be given every encourage- ment to produce a maximum in the shortest possible time. (2) The morale and unity of the American people should be promoted and not impaired. (3) Inflation must be prevented. (4) The nation should be strong and united after the war ends. National income, gross national product and income payments The term “national income,” much used in time of peace, can be misleading in time of war. The more useful term is “gross national prod- uct.” Gross national product represents the gross total of all goods and serv- ices produced in the economy valued at market prices. (Calendar 1943: $187 billions.) National income is the net product of the economy’s activity; and repre- sents the gross national product less the amount of wear and tear on ex- isting plant and equipment, and the amount of taxes paid by business to government. (Calendar 1943: $148 billions.) Income payments consist of all income distributed to individuals whether from productive activity and included in national income or from relief and social security payments Prepared by Education Section, War Finance Division, U. S. Treasury Depart- ment, Washington 25, D. C.
|Title||War financing for peace & prosperity: how war bonds help speed victory, check rising prices, insure post-war prosperity: facts and discussion questions|
United States. Treasury Department. War Finance Division. Education Section
World War, 1939-1945--Finance--United States
World War, 1939-1945--Economic aspects--United States
Savings bonds--United States
|Contributing Institution||Illinois State Library|
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