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I've been watching classic cartoon shorts from Disney and Warner Brothers. So many devoted time to encouraging Americans to buy war bonds.

Did money collected from war bonds amount to a significant contribution to the overall US war effort? Were those who purchased war bonds rewarded with a decent return, or was it more of a philanthropic sacrifice for the country?

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In further research, I found that the strategy of the government with regard to national debt is to grow the economy such that debt that appears monstrous in now becomes insignificant in the future. (It is strange to think that inflation helps to cure national debt.) It sounds like war bonds (in total dollar amounts) probably did more to help the American people than it helped fund the war. –  Brien Malone Feb 12 '12 at 9:28

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The sale of war bonds "sterilized" the otherwise humongous U.S. debt. That is, while debt was historically large (by any standards except today's), we "owed it to ourselves" and not to foreigners. Which is to say that the money was available to be "recycled" into the U.S. economy after the war.

But the main benefit was AFTER the war. The country saved something like 25% of its GDP annually during almost four years of war. When it ended, the average American family had almost one year's wages in savings, most of it in war bonds.

That financed the greatest peacetime economic boom in American history, and allowed for returning soldiers to be employed in civilian pursuits, at higher productivity rates than they enjoyed before the war.

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Brilliant! Thank you. That was exactly the sort of answer I was hoping for. Bonds were more useful than I imagined. I think the constant push to "invest in America" helped inspire nationalism as well. Any thoughts as to why we don't see similar drives today? –  Brien Malone Nov 12 '11 at 3:00
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@BrienMalone: We should. Jimmy Carter would have called it the "moral equivalent of war." He was not a good President in most respects, but he was right on the money with "moral" issue. That's the kind of leadership we need today (a more effective version, that is). –  Tom Au Nov 12 '11 at 16:54
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I'd always seen the cartoons for this and the notes on buying bonds, but never gave consideration for what would happen after. The idea of one years wages of savings would definitely be an impact at the time, very nice. –  MichaelF Nov 14 '11 at 12:57
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@TomAu - What exactly are you saying Carter would have called the moral equivalent of war? –  Chad Nov 15 '11 at 18:37
    
@Chad -- I didn't quite follow that either until I read up on the speech. Carter's "moral equivalent of war" speech was about the energy crisis. He was trying to drive the people to respond to the energy crisis by saving and reducing consumption - the way we did in times of war. (The speech gained a lot of notoriety, but didn't result in any long term behavioral change.) –  Brien Malone Feb 12 '12 at 9:24

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