Which was an economic outcome of the Vietnam War for the United States in 1968?

• A. A deficit around $26 billion
• B. A significant budget surplus
• C. Reduced military spending
• D. No change in the budget

Answer: (A)

The key idea here is that war spending can push a country into a budget deficit, and by 1968 the United States was Financing the Vietnam War with large outlays that far exceeded what the government collected in revenue. The war required vast military expenses, and even while some taxes and other revenues grew, they didn’t keep pace with the total spending. To cover the shortfall, the government borrowed, adding to the national debt and producing a sizable deficit for the year—around $26 billion. This isn’t about spending less or about revenues rising enough to exceed outlays; those would produce a surplus. It also isn’t about there being no change in the budget, since the period saw a clear increase in military and related spending. So the deficit reflects the wartime costs outweighing revenue in that year.