Buy War Bonds

Monday 14 April 2008 | general

A colleague once bemoaned the lack of solidarity concerning the war in Iraq compared to that in World War II.

There are a lot of differences, cultural and otherwise, and the cultural differences have a lot to do with what happened in Vietnam. Even without Vietnam, though, there are enough differences between the US of 1941 and the US of 2008 to explain compellingly why we were more united in the effort 60+ years ago than we are now — and none of these reasons has anything to do directly with the war itself.

Certainly there are important differences regarding the nature of the wars: Hitler was not hiding his ambition to conquer Europe; Iraq was, at the very least, not being blatantly aggressive. But that is not the fundamental difference.

The main difference is economic.

The economic reason people were so united was that we had to pay for the war somehow — then and there. We bought war bonds; we conserved; we preserved; women took men’s jobs; we skipped vacations.

The Second World War was an expensive proposition. It was even more expensive considering the fact that America had just suffered the Great Depression. It was still more expensive considering the fact that America the dollar was still based on the gold standard, and all that money had to back by something other than loans and good intentions, as it is today. So when we built a plane or manufactured a round of ammunition, it ultimately had to be backed with gold. The government could not just print off money or get a loan. It had to pay for all the materials outright.

James McGovern explained it thusly in The Boston Globe

Currently, we are paying for the war in Iraq not through the normal budget process but by borrowing and increasing the national debt – by putting the costs onto the national credit card. Every morning, countries like China and India buy up this debt, further weakening our economy and our national security. (Globe)

Not so in 1941. If we went to war, we paid for it.

That’s why World War II stimulated the American economy — because real money, backed by gold — was changing hands. The current war does nothing to stimulate the economy because we’re only getting loans to pay for it.

The only way to change this is to get America back on the gold standard. However, this is all but impossible: most American’s don’t even know that we’re no longer on the gold standard, and even if they did, most wouldn’t want to return. “Why, we have enough to pay for with gas at $3.30 a gallon!”

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