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Albert Gates

“How Much Is $41 Billion?”

National Budget Reveals Growth of Militarism

(16 September 1946)

From Labor Action, Vol. 10 No. 37, 16 September 1946, p. 3.
Transcribed & marked up by Einde O’Callaghan for ETOL.

“How much is $41 billion?,” asks the Bulletin of the National City Bank of New York, one of the largest financial institutions in the world. The $41 billion in the question, represents the new government budget for the year ending June, 1947. Its significance may be made clearer when it is realized that the little noticed budget report made by President Truman for the “single peacetime year ending June 30, 1947” contemplates “expenditures ... more than in the THREE YEARS of World War I, more than in the entire DECADE of the twenties, and more than in the FIVE YEARS of liberal spending just before the outbreak of World War II. It is twenty-six per cent of the estimated total national income, and imposes a tax burden of around $1,000 on the average American family.” (Emphasis in the Bulletin)

Of course, the $1,000 average does not mean that every American family pays such a tax, although taxes for the average American are vastly higher than they have ever been, higher than even the highest paid worker can afford to pay. But it does mean that the taxes on big business, the monopolies, corporations and all enterprises, as well as upon individual capitalists and those with high incomes, are not reduced to levels which they desire.

New Role of American Capitalism

The present boom in economy, featured by a high level of employment, high production, high inventories and the maintenance of the national income at near war-peak levels, has caused the proposed expenditures in the budget to be overlooked. Yet the division of the budget reveals concretely the new role of American capitalism in the world of today and how it is reflected in domestic policy.

One can extract from its figures the drift of American foreign policy from isolation to intervention in world events and the dependence of its economy on that of the world. The cause for the changes in the budget is due to that more than anything else. For the budget, the largest in the peacetime history of the United States, is concentrated on military expenditures in preparation for new economic, political and military struggles on a world scale.

For example, the budget for the year 1939 was $8,707 billion. For 1947, it is $41,539 billion, or an increase of $83,832 billion. The Bulletin aptly says: “With the wartime experience so close behind us – when public funds were poured out in profusion ... our sensibilities have been dulled.” They certainly have. The tremendous expenditures which are called for are not for the purpose of vast public works, unemployment relief, i.e., for plugging the breaks in a collapsing economy. This is a budget based upon an existing economic boom, irrespective of its artificial and temporary character.

Eighteen Billion for “National Defense”

Of the $41,539 billion, a little less than half, or $18,505 billion is for “national defense.” Over $4 billion is for international finance, indicating the involvement of American imperialism in the world economy. Here is a summarized table of comparison in the national defense budget of 1939 and 1947, the year of peace.


Fiscal Years
ending June 30



(in billions of dollars)

War Department

$  490

$  8,060

Navy Department



Terminal leave personnel



U.S. Maritime Commission



War Shipping Administration



Other (including UNRRA)



National Defense subtotal



Other elements in the budget show that veterans pensions and benefits have increased from $557 million to $6,205 billion. This is an item which properly belongs to “national defense” and war expenditures to which it is entirely related. The same can be said of $4,168 billion for international finance (nothing was spent in this field in 1939) which is a reflection of the new world position of the United States. It is an item which not only emerges from the political and diplomatic problems of the war, but is intimately related to the drive of the imperialists toward a new War.

Add these respective figures together and you will find that the new budget calls for an expenditure of $28,881 billion for “national defense” and war out of a total budget of $41,539.

Why should it be necessary for the government to expend almost three-quarters of the largest peacetime budget in American history for “national defense” after the war has been fought and won? For the simple reason which Labor Action has repeatedly suggested; this was no war for democracy or peace; it was a war between imperialist's struggling for a new re-division of the world. The military phase of the war between the powers has ended. But just as World War I did not and could not solve the problems of imperialist. capitalism, so this war did not solve them. No sooner had World War II ended when the erstwhile Allies, organized in the so-called United Nations, began the terrible new struggle for world domination. And because war has not been eliminated as “a way of life” of capitalism, the powers have begun preparations for the next war.

This does not mean that the war will break out tomorrow. But it does mean that preparations for the next war are not being postponed; each power waits in readiness for it.

And Two Billion for Peacetime Uses

In contrast to the especially high expenditures for national defense and war is the declining expenditures for peacetime purposes. Here are some of the figures:


Fiscal Years ending June 30,



(in billions of dollars)

Social security, relief and retirement funds



Housing (civilian)



General public works program






In anticipation of a lasting boom and prosperity, the budget pared off expenditures on public works, social security, relief and retirement funds. Housing, which remains the most acute problem for all the people, especially the veterans, is to be allocated the miserable sum of $202 million. Compare this with the sum of $18,508 billion to be spent directly for national defense and you can readily see what is wrong with the government housing program.

But suppose the boom and prosperity does not last beyond a year or two (something which is already indicated in the present economy). Obviously, then, the government will be forced to do what Roosevelt did in the Thirties: to make enormous expenditures for relief and public works. Will this mean a sharp decline in military expenditures to compensate for the increase in public relief funds? Only in part.

After the first year’s budget has enabled the War and Navy Departments to organize their new post-war war programs, there will be some decline in expenditures until a new war occurs. The national budget as a whole will decline somewhat after 1947, but even with its decline, it will remain abnormally high in comparison to previous peacetime history. This is due principally to the part that the war danger remains a permanent disturbing factor under imperialist capitalism. It will mean that the general burden of the masses who work in order to live will be heavier – not only for the present generation but of those to come.

Intervention in World Economy

The war merely accentuated a tendency that was already inherent in American capitalism: intervention in the world economy. In contrast to the Twenties, American economy has become completely interlinked to the world economy. Its hope for long lasting economic prosperity, given its present expansion and great productivity in a historically shrinking national market, lies in the economic domination of the world economy, the world market and sources of raw material.

Isolationism, a political phenomenon which reflected the little dependence American economy had upon the world market, is dead today. This is finally recognized by all sections of the capitalist class. And it is precisely for this reason – world economic domination – that the United States has become deeply involved in all the political, diplomatic and economic struggles of powers. To withdraw from these struggles, to hide behind the borders and coast-lines which surround the United States, is to deny the inherent tendency of the economy toward world expansion.

But international expansion in a world drawn closely together by modern invention, in a world whose market is itself shrinking, means the intensification of the conflicts with rival capitalist powers who need and seek the same things as American capitalism. These economic rivalries produce sharp political and diplomatic struggles which represent a prologue to war. In recognizing what the other powers have known for a long time, American capitalism has adopted the internal political policies similar to those existing in the older capitalist nations.

Conscription of servicemen after a war takes place for the first time. Tremendous military expenditures indicate a preparation for war. The military elements, of the country and the bureaucracy have a stronger weight in government and in the social life of the country. Thus, what was theoretically foreseen by Marxian socialists as the inevitable outcome of this war if capitalism survived, is now a reality. And this change is revealed unobtrusively, as though it were a natural phenomenon, in the new budget of the Truman administration.

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