Modern Money and the War Treasury

Abstract

: Using historical sources, I attempt to piece together the economic worldview held by the United States Treasury Department during World War II. Analyzing the Treasury’s view of taxation, bond sales, and interest rates, this article considers whether and in what ways this worldview is compatible with Modern Monetary Theory. I conclude that in most regards, the two align closely, the differences being primarily attributable to the peculiarities of war finance. Finding a less clear view of national debt, an interpretation is offered based on Treasury’s statements. Additional evidence shows that this view had a small but significant foothold in the era’s news outlets.