22 - 04 - 2014
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Social and Industrial Consequences of the War

The total cost of the war to the federal government between 1941 and 1945 was about $321,000,000,000 (10 times as much as World War I). Taxes paid 41 per cent of the cost, less than Roosevelt requested but more than the World War I figure of 33 per

cent. The remainder was financed by borrowing from financial institutions, an expensive method but one that Congress preferred over the alternatives of raising taxes even higher or making war bond purchases compulsory. In consequence the national debt increased fivefold, amounting to $259,000,000.000 in 1945. The Revenue Act of 1942 revolutionized the tax structure by increasing the number of those who paid income taxes from 13.000,000 to 50,000,000. At the same time, through taxes on excess profits and other sources of income, the rich were made to bear a larger part of the burden, making this the only period in modern history when wealth was significantly redistributed.

 

Despite the vast number of men and women in uniform, civilian employment rose from 46,000,000 in 1940 to more than 53,000,000 in 1945.

 

This shortage of manpower led to blacks making significant social and economic progress. Although the armed forces continued to practice segregation, as did Red Cross blood banks, Roosevelt, under pressure from blacks, who were outraged by the refusal of defense industries to integrate their labor forces, signed Executive Order 8802 on June 25, 1941. It prohibited racial discrimination in job training programs and by defense contractors and established a Fair Employment Practices Committee. By the end of 1944 nearly 2,000,000 blacks were at work in defense industries. As black contributions to the military and industry increased, so did their demands for equality.

 

The fact that the USA had no military operations on their territory allowed them not only to preserve the pre-war economic situation but also improve it considerably. The necessity of war production promoted advanced branches of science and helped to eliminate unemployment which had been one of the gravest ills of the nation during the 30s. By the end of the war, the USA became the greatest power in the world.



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