AHC: United States goes bankrupt for WW2

The challenge is this, can you bring about the same economic exhaustion, that Britain and France experienced, to the United States. Literal bankruptcy is not required. What would it take, would a much more greweling war cause enough damage? Would a more limited war leave unemployment sky high and the economy depressed. Is it even possible to bring the US economy to its knees through war, if barbarossa couldn’t take down the Soviet economy, what plausible event could possibly do it for the Americans?


Anyway gimme some cool ideas. feel free to have any pod, I dunno, after 1932.
 
Hardly possible.

The only idea I have is to have a couple in Manhattan project size governmental programs running that turn out to be cimplcompl useless
 
Hardly possible.

The only idea I have is to have a couple in Manhattan project size governmental programs running that turn out to be cimplcompl useless
This idea is interesting.

What other projects could America possibly fund that could compete with the Manhatten Project?
 
This idea is interesting.

What other projects could America possibly fund that could compete with the Manhatten Project?
Large scale rocketry programs, more heavy bomber programs (B-29 program cost more than Manhattan), UK and Canadians shove Habbakuk onto the US, US decides it needs that third Lock set during the war, oh and Nicaragua too, etc. Of course the US is in such a position where it would run out of bottleneck resources before it ran out of money, and is not going to be damaged to the degree Britain and France were, plus is not going to enter as early as them
 
The Soviets collapse leaving the Nazi's in control of pretty much everything stretching from the Urals to Lisbon. The UK,US, and British empire have to conquer Europe. Probably your best bet.
 
The United States could have funded an Intercontinental Ballistic Missile program that had the goal of sending rockets to targets in Germany and Japan with the throw weight that could carry atomic warheads, the war would have been over before that could happen.
The United States could have allowed for more consumer products being made and sold, that would have increased the cost of what the government paid for war materials as there would have been competition over the resources needed to manufacture them.
But the main thing that makes the question hard to happen is that the United States is really big and prosperous and did not suffer anywhere near the hardships that other countries did and that is why the United States going bankrupt is very hard to do.
 

Lusitania

Donor
How about a banking crises. Have US banks lend twice the amount of $ to Nazi getmany. Let’s say certain ideological sympathetic bank executives approve loans. When Germany enters war stops paying (was already paying old loans with new loans in 1939).
 
Pretty much the only way, IMO, is to have WWIII immediately follow WWII, almost certainly by accident, because neither side actually wanted it (not even Winnie, really).
 
Pretty much the only way, IMO, is to have WWIII immediately follow WWII, almost certainly by accident, because neither side actually wanted it (not even Winnie, really).

I reckon this is a good route, some shit falls out between the WAllies and the Soviets and it all falls apart from there.
 
How about a banking crises. Have US banks lend twice the amount of $ to Nazi getmany. Let’s say certain ideological sympathetic bank executives approve loans. When Germany enters war stops paying (was already paying old loans with new loans in 1939).

American loans to Germany were almost entirely pre 1933. Hitler started up an economic regime that effectively defaulted on American loans pretty quick after taking power. So the loans would have to be to the Weimar republic and probably pre crash.
 
If you can get the American mainland attacked and have the Northeast and Midwest get utterly destroyed then it could happen. However a 1932 PoD renders that basically impossible.
 

Zachariah

Banned
Lots of people trying and struggling to come up with added expenditures large enough to make this happen. But how about looking at the other side of the coin, and greatly diminishing the US government's revenue stream instead? Expenditure doesn't pay for itself, after all. And if you take a look at what happened with taxation in the USA leading up to, and during, WW2...
page1-800px-Federal_taxes_by_type.pdf.jpg

...the USA could've easily gone bankrupt if several of the tax measures which were introduced failed to get through. In World War II, tax law revisions increased the numbers of “those paying some income taxes” from 7% of the U.S. population (1940) to 64% by 1944, and roughly 75% by the end of the war, vastly broadening the tax base and increasing the total intake. And in 1932 the top marginal tax rate was increased from 25% to 63% in one stroke, and steadily increased from there, reaching 94% (on all income over $200,000) in 1945. Since you've cited a POD of 1932, how about a failure to get the Revenue Act of 1932 passed by Congress, and the subsequent continual refusal to raise United States tax rates across the board, with the rate on top incomes limited to no more than 25% from then on as a result?
 
Lots of people trying and struggling to come up with added expenditures large enough to make this happen. But how about looking at the other side of the coin, and greatly diminishing the US government's revenue stream instead? Expenditure doesn't pay for itself, after all. And if you take a look at what happened with taxation in the USA leading up to, and during, WW2...
page1-800px-Federal_taxes_by_type.pdf.jpg

...the USA could've easily gone bankrupt if several of the tax measures which were introduced failed to get through. In World War II, tax law revisions increased the numbers of “those paying some income taxes” from 7% of the U.S. population (1940) to 64% by 1944, and roughly 75% by the end of the war, vastly broadening the tax base and increasing the total intake. And in 1932 the top marginal tax rate was increased from 25% to 63% in one stroke, and steadily increased from there, reaching 94% (on all income over $200,000) in 1945. Since you've cited a POD of 1932, how about a failure to get the Revenue Act of 1932 passed by Congress, and the subsequent continual refusal to raise United States tax rates across the board, with the rate on top incomes limited to no more than 25% from then on as a result?
Wouldn't a version of it get passed a year later by FDR and the dems anyways after the election?
 

Marc

Donor
Bankrupt is very different from being economically ruined. The former technically isn't possible for a sovereign country, yes a country could default on their bonds, but there is no "state of bankruptcy" their creditors have no redress outside of refusing to lend more money - which as it may surprise many, hardly happens.
And if the bonds are denominated in local currency, defaulting doesn't happen, that infamous power of the printing press. The great vulnerability for debt laden countries pre-WW2 was having gold be the denomination - a situation fixed after the war.
Now being ruined is another matter, but as Germany and Japan can testify, it's not a long term event.
 
Crash the economy harder for America during the depression and keep economic activity depressed as much as possible. That doesn’t fulfill the challenge, but it can help if we get unemployment up past 25% and never below 20%.

If America gets involved in 1939 while being as unprepared as the OTL so they don’t prevent the Fall of France but fight an extra 27 months, and add in some generic Axis Wank so the war still lasts until 46 or 47 and we might get there. Maybe America joins in 1939 but the Soviets don’t go to War until 1945 or something, remaining as a German ally until that point.
 
Lots of people trying and struggling to come up with added expenditures large enough to make this happen. But how about looking at the other side of the coin, and greatly diminishing the US government's revenue stream instead? Expenditure doesn't pay for itself, after all. And if you take a look at what happened with taxation in the USA leading up to, and during, WW2...
page1-800px-Federal_taxes_by_type.pdf.jpg

...the USA could've easily gone bankrupt if several of the tax measures which were introduced failed to get through. In World War II, tax law revisions increased the numbers of “those paying some income taxes” from 7% of the U.S. population (1940) to 64% by 1944, and roughly 75% by the end of the war, vastly broadening the tax base and increasing the total intake. And in 1932 the top marginal tax rate was increased from 25% to 63% in one stroke, and steadily increased from there, reaching 94% (on all income over $200,000) in 1945. Since you've cited a POD of 1932, how about a failure to get the Revenue Act of 1932 passed by Congress, and the subsequent continual refusal to raise United States tax rates across the board, with the rate on top incomes limited to no more than 25% from then on as a result?

Why wouldn't they increase taxes once war happens? They would eventually raise taxes once the foreign situation changes. Why would they persist in this way once the government needs more money?
 

RousseauX

Donor
Lots of people trying and struggling to come up with added expenditures large enough to make this happen. But how about looking at the other side of the coin, and greatly diminishing the US government's revenue stream instead? Expenditure doesn't pay for itself, after all. And if you take a look at what happened with taxation in the USA leading up to, and during, WW2...
page1-800px-Federal_taxes_by_type.pdf.jpg

...the USA could've easily gone bankrupt if several of the tax measures which were introduced failed to get through. In World War II, tax law revisions increased the numbers of “those paying some income taxes” from 7% of the U.S. population (1940) to 64% by 1944, and roughly 75% by the end of the war, vastly broadening the tax base and increasing the total intake. And in 1932 the top marginal tax rate was increased from 25% to 63% in one stroke, and steadily increased from there, reaching 94% (on all income over $200,000) in 1945. Since you've cited a POD of 1932, how about a failure to get the Revenue Act of 1932 passed by Congress, and the subsequent continual refusal to raise United States tax rates across the board, with the rate on top incomes limited to no more than 25% from then on as a result?
The government can just print money during war to avoid bankruptcy and use rationing to control inflation
 
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