World War II was the most expensive war in American history, exceeding all other conflicts in economic impact. Nearly forty million Americans paid income taxes for the first time, and an elaborate price control system touched the life of every consumer. To sell war bonds, the U.S. government made direct and frequent contact with more than 90 percent of the American population. The U.S. government financed a massive expansion of the nation's defense industry, so that by 1945 the government owned billions of dollars worth of factories and machinery.

Planning

During the two years before the United States entered the war, the enormity of America's financial burden became apparent. At the war's peak, federal expenditures were twelve times greater than in the last peacetime year. President Franklin D. Roosevelt hoped to pay for half the cost of the war, or more, out...