E-LOGOS 2022, 29(2):23-47 | DOI: 10.18267/j.e-logos.493

The Role of Federal Government in the United States War Economy during World War II

Zdenka Johnson
Prague University of Economics and Business

Řízení válečné ekonomiky během druhé světové války přinášelo americké federální vládě mnoho zásadních výzev. Klíčovým nástrojem pro zvládnutí tohoto nelehkého úkolu byla fiskální politika. V této převratné době došlo k etablování mnoha nových prvků v americké ekonomice i fiskální politice. Některé z nich jsou patrné dodnes. Cílem této studie je analyzovat a kriticky zhodnotit hlavní trendy ve vývoji válečné ekonomiky a fiskální politiky USA během druhé světové války. Dílčí výzkumné otázky se týkají role federální vlády během strukturálních změn v hospodářství či významu vlády v hospodářském růstu v kontextu dalších výdajových složek hrubého národního produktu. V rámci fiskální politiky je zkoumána struktura výdajové stránky federálního rozpočtu s ohledem na dominanci válečných (obranných) výdajů, rozložení daňové zátěže mezi ekonomické subjekty a přímé a nepřímé daně či způsobů financování zvýšených vládních výdajů. Na základě metody dekompozice růstu hrubého národního produktu a analýzy časových řad lze tvrdit, že logicky docházelo k vytlačování spotřeby domácností a investic firem vládními spotřebními výdaji. Pochopitelně tento závěr platí i pro výsledky strukturální analýzy hrubého národního produktu. Regulatorní role federální vlády tedy byla na mnoha dílčích trzích zcela zásadní. Co se týče fiskální politiky, válečné výdaje významně dominovaly výdajové stránce federálního rozpočtu. V části neválečných výdajů se nejvíce prosadily kapitoly obchod a doprava a mezinárodní záležitosti a finance. Na příjmové straně rozpočtu se výrazně zvyšovaly přímé progresivní individuální daně, mírněji pak korporátní daně. Prohlubující se fiskální deficit byl financován z více jak poloviny nedluhově, tj. vyšším daňovým výběrem, z menší části pak kumulací dluhu.

Keywords: válečná ekonomika, federální rozpočet, strukturální analýza, daňová kvóta, zadlužení, efekt vytěsňování, dekompozice hospodářského růstu

Managing the war economy during World War II presented many fundamental challenges to the U.S. Federal government. Fiscal policy was a key tool for completing this daunting task. This revolutionary time saw the establishment of many new elements in the American economy and fiscal policy; some have not been removed since. The aim of this study is to analyze and critically evaluate major trends in the development of the war economy and fiscal policy in the United States during World War II. The sub-research questions concern the role of the Federal government during structural changes in the economy as well as the importance of government in economic growth in the context of other GNP spending components. In fiscal policy, the structure of the expenditure side of the Federal budget is examined with respect to the dominance of war (defense) spending; the distribution of the tax burden among economic agents and direct and indirect taxes; or the methods of financing increased government spending. Based on the GNP growth decomposition method and time series analysis, we argue that there was a strong crowding-out effect of household consumption and business investment by government spending. Naturally, this conclusion also applies to the results of the structural analysis of GNP. Hence, the regulatory role of the Federal government was quite crucial in many submarkets. In terms of fiscal policy, war spending significantly dominated the expenditure side of the Federal budget. In war-unrelated spending, chapters like trade and transportation and international affairs and finance had the most prominence. On the revenue side of the budget, direct progressive taxes on individuals increased significantly, as did taxes on corporations. The deepening fiscal deficit was financed primarily by higher tax collection and to a lesser extent by debt accumulation and monetization.

Keywords: war economy, Federal government budget, structural analysis, tax quota, indebtedness, crowding-out effect, economic growth decomposition

Received: January 13, 2023; Accepted: January 13, 2023; Published: January 13, 2023  Show citation

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Johnson, Z. (2022). The Role of Federal Government in the United States War Economy during World War II. E-LOGOS, 29(2), 23-47. doi: 10.18267/j.e-logos.493
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