Title: The Economic Costs of the Civil War - Foundation for Economic Education
Headings: The Economic Costs of the Civil War
The Economic Costs of the Civil War
Pensions and Tensions
Bribes Across America
Some Rollbacks
Burton W. Folsom

Content: Four years of civil war changed all that forever. In 1865 the national debt stood at $2.7 billion. Just the annual interest on that debt was more than twice our entire national budget in 1860. In fact, that Civil War debt is almost twice what the federal government spent before 1860. What’s worse, Jefferson’s vision had become a nightmare. The United States had a progressive income tax, an estate tax, and excise taxes as well. The revenue department had greatly expanded, and tax-gatherers were a big part of the federal bureaucracy. Furthermore, our currency was tainted. The Union government had issued more than $430 million in paper money (greenbacks) and demanded it be legal tender for all debts. No gold backed the notes.