World War and the Growth of Global Power 249went out to replace the old stock—including 500,000 rifles and 76,000
machine guns—so stripping the arsenal gave a huge boost to American pro-
duction. Just after that, in August 1940, Congress passed another bill, as noted
above, which doubled spending from $5 to $10 billion. A congressional report
noted that since June 1940, Ford, GM, Chrysler, GE, Westinghouse, and “prac-
tically all of our great mass-producing corporations have begun work on war
orders.” The New Deal may have had some limited successes, but Military
Keynesianism had come to the rescue!
Perhaps most importantly, this huge growth in military spending created
jobs. In September 1940, Congress passed the Selective Service Act to institute
a military draft and authorize an army of 1.4 million men. In June 1940 there
were 458,000 military personnel, but a year later that number was up to 1.8
million, and they were receiving paychecks. As a result, 1 percent of the entire
labor force was employed in building military training camps. Employment
quadrupled between 1939-1940 in the aircraft engine divisions of certain
plane manufacturers, and output in that industry tripled in the same period.
The coming naval buildup led to 450,000 new shipbuilding jobs, another full
percentage point of the total labor force. New England machine tools facto-
ries hired on 65,000 new workers and aircraft employment in Los Angeles
County rose from 12,000 in October 1938 to 57,000 in early 1941 and again
to 100,000 by late 1941—again, it is worth stressing, before the U.S. entered
the war in December. Business Week estimated that federal military expendi-
tures would jump to $16 billion in 1941 [out of total national income of $85
billion] and $24 billion in 1942 [out of total of $93 billion].
With so many new jobs being created, consumption, the fundamental
problem of the depression, began to rise. Between 1939-41, consumer spend-
ing rose 16 percent. Military spending was thus not just going to big items
like tanks and planes, but reaching virtually every household in America.
Because of rationing and shortages after the U.S. entered the war, spending
did not rise significantly and so people saved their new incomes, but after the
war, between late 1945 to 1948, consumer spending soared by over 50 percent
overall and 31 percent per capita. Clearly, military spending for World War
II had created incredible prosperity in America, and it began before the U.S.
even entered the war. In a December 29th, 1940 speech, FDR told his radio
listeners that the U.S. would be an arsenal for democracy, meaning that it would
provide weapons for the British or any other state fighting against the Nazis.