World War Ii Defense Spending

DURING WORLD War II defense spending in the United States exploded from two percent of GDP in 1940 to a peak of 42 percent in 1945 and then back down to seven percent by 1947.

But the data series of “Federal Government Expenditure, by Function: 1902 to 1970” in the Census Bureau’s Historical Statistics of the United States: From Colonial Times to 1970 only tabulates federal spending every two years: 1940, 1942, 1944, etc.

Fortunately, the Executive Branch’s budget documents published by the US Government Printing Office at gpoaccess.gov include a set of historical tables, including Table 3.1 — Outlays by Superfunction and Function: 1940–2012. This table includes spending for national defense for each year of World War II. The problem is that the numbers in Table 3.1 don’t match up with the Census Bureau numbers in Historical Statistics.

Comparison of World War II Defense Spending (billions of dollars)
Spending Item	1940	1941	1942	1943	1944	1945	1946	1947	1948
Census Bureau Numbers for “National defense and international relations”
Total	1,590		26,555		85,503		50,461		16,075
Military services only	1,567		22,633		74,670		42,677		10,642
Executive Branch budget numbers in Table 3.1
National Defense	1,660	6,435	25,658	66,699	79,143	82,965	42,681	12,808	9,105

You can see the problem. Not only does the Census Bureau not include the odd years, but the numbers don’t agree with the Executive Branch budget.

We chose to fill in the missing numbers in the the Census Bureau dataset by making them track the trajectory of the numbers in the Executive Branch dataset. Here are the results:

Construction of World War II Defense Spending Dataset (billions of dollars)
Spending Item	1940	1941	1942	1943	1944	1945	1946	1947	1948
Census Bureau numbers interpolated with numbers from Executive Branch dataset
Total expenditure	10,061	14,161	35,549	82,980	100,520	106,877	66,534	41,403	35,592
Total defense & intl	1,590	6,696	26,555	69,884	85,503	92,016	50,461	19,560	16,075
Military only	1,567	5,875	22,633	60,882	74,670	80,617	42,677	13,888	10,642
Executive Branch budget numbers in Table 3.1
Total federal outlays	9,468	13,653	35,137	78,555	91,304	92,712	55,232	34,496	29,764
National defense	1,660	6,435	25,658	66,699	79,143	82,965	42,681	12,808	9,105

We have interpolated values for national defense and for total federal spending in the odd years by translating the shape of the Executive Branch data into the Census Bureau dataset.

Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.

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