Millions of Americans were employed directly in the war effort This helped keep

Millions of americans were employed directly in the

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competing for how many goods. Millions of Americans were employed directly in the war effort. This helped keep employment high, but without cantributing to the production of consumer goods. As more wages com- peted for what goods there were, prices naturally went up. As prices rose, labor began demanding higher wages. The result was a sriral of inflation that lasted until the recessioh of 1982. Inflation averaged about 1.3 percent per year over 1960-65, jumped to 2.9 percent over 1966- 67, 4.2 percent for 1968, 5.4 percent for 1969, and 5.9 percent for 1970. Of course, federal spending on human service programs also contri eted to inflationary pres- sures. Such spending increased greatly under President Johnson's "war on poverty." To curb this trend, Johnson would have had to raise tates. However, he refused to do so for fear of provoking opposition to the war. In order to control the inflation, the Federal Reserve Bank raised interest rate,: on loans, making it harder for people to borrow for houses and cars. This led to a 750,000 a year decline in new housing construction and a decline in new car sales. This, in turn, led to layoffs in manufacturing and increased pressure on human services. Both the U.S. budget deficit and balance of payments deficit grew rapidly. Few people can comprehend the magnitude of the figures we are discussing. As former Illinois Senator Everett Dirksor. once said in describing the Congres- sional budget process, "A million here, a billion there, pretty soon you're talking about real money." To give you some idea, however, consider these reflections on the alternative uses to which the money spent on the war might have been put. In 1972, Lekachman suggested that, just for the annual direct cost of the war at the time, the government could have rehabilitated all urban slum housing in this country, creating many construction jobs in the process. Such an investn.ent would have helped much to alleviate the rising problem of the 280 homeless we face today. Two years earlier, Melraan used roughly the same rate of war spending and calcu- lated: 1. Each month of the war could have financed the complete training of over 100,000 scientists. 2. Each month of the war could have financed the annual food bill for ending hunger among 10 million Americans. 3. Each month of the war could have paid the full year's cost of state and local police in every state of the union. 4. The annual cost of the Vietnam war could have doubled the Social Security benefits paid to 20 million Americans. Of course, no one is saying that any money not spent on the Vietnam War would have or even should have been spent on the above social programs. However, such comparisons do make the trade-offs in our overall national security even more concrete for leaders and c itizens. Social and Political Costs For many Americans the early 1960s were a time of hope. Throughout the south blacks were challenging segregation and demanding their right to vote. Con- gress passed major Civil Rights and Voting Rights bills; President Johnson declared a "war on poverty"; and the apathetic 1950s seemed to be giving way to a period of social and political progress. Young, idealistic Ameri-
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