4. In what ways did World War II contribute to the growth of the federal government? How did it foster what historians now call the military-industrial complex?
World War II majorly contributed to the growth of the federal government through the universal taxation of incomes to help fund the war, a huge military establishment, and multibillion-dollar budgets. All of these things more than likely would not have come about in the size that they did if World War II never started, although World War I did have a part in it also (Henretta 725).
US Troop numbers during the war reached 12 million men and women required a huge number of resources in order to keep up with military demands. Some of these additional resources include but are not limited to housing, subsistence, clothing, medical care, training, and transportation, not to mention the special equipment, arms, ammunition, and expensive weapons platforms that now included tanks, fighter and bomber aircraft, and naval aircraft carriers (Higgs).
World War II had cost the US government ten times that of what World War I did which is why the government levied so many new taxes. The government continued to raise income taxes to the point that income taxes went from 23 percent up to 94 percent as the "class tax" grew into a "mass tax". Even after the federal government was bringing $43 billion dollars more in revenue, they still had to finance a large portion of the war through borrowing. This large amount of borrowing from other countries led to the national debt going up to $200 billion which was 5 times larger than pre war debt (Higgs).
The government pretty much put the free market on hold through using a large system of controls and market interventions to obtain goods without having to outbid competitors in order to obtain them in the free market. They managed to fix prices, distribute physical and human