War begun without good provision of money beforehand . . . is but as a breathing of strength and blast that will quickly pass away. Coin is the sinews of war.
—Rabelais
When war began in Korea, Americans had good reason to believe that the sinews of their war machine were tough & thick; never in peacetime had U.S. coin been spent so lavishly on the armed forces of the nation.
In the five years after World War II, the U.S. had poured out a staggering $90 billion for the Army, Navy and Air Force. Another $3.4 billion went for other defense expenses such as atomic energy, military aid abroad, stockpiling of strategic materials. In 1949, the defense bill came to $100 for every man, woman and child in the U.S., v. only $8 apiece in 1938. The total defense outlay was nearly half again as much as 1941's entire U.S. budget.
Yet the first agonizing weeks in Korea proved well enough that all this coin had failed to develop the sinews of war. Said one military man: "The fist is still there, but the muscles of the arm have been wasted away."
For its $90 billion the U.S. got—not a powerful fighting force—but only ten combat divisions. And even those were sadly understaffed, full of green troops, and underequipped. U.S. tanks, almost all left over from World War II, were obsolescent; antitank weapons were out of date. Most of World War II's mighty Navy lay cocooned, prepared to fight off rust rather than an enemy. Even the Air Force, the strategic bombing darling of military planners, had to scramble to find planes to give ground troops limited tactical support.
Faced by the shocking weakness of its armed forces many an American bleakly asked:
Where did the $90 billion go?
Why did the U.S. get so little for its money?
How much will it cost to guarantee reasonable security in the future?
WHERE WASTE BEGAN
One reason the U.S. got so little for its money was that $42 billion of the $90 billion was not spent to prepare the U.S. for the future. It was spent to wind up World War II.
At war's end the U.S. had vast stores of equipment which it had not yet paid for, more billions still on order which it suddenly did not need. It spent $6.8 billion simply terminating contracts for undelivered goods.
There was enormous wastage: because Congress had provided no sound accounting system to check on payments, the U.S. overpaid to the extent of an estimated half a billion on terminated war contracts. There was fraud and there were mistakes; Comptroller General Lindsay Warren found glaring errors in one out of every seven of the settlements he examined —"and never an error in favor of the Government." At the time, everyone thought that haste, even though it meant waste, was better than delay which might have cost the nation a bigger sum in lost civilian production, long lines of unemployed and slow reconversion of plants to peace.