Editing Guns versus butter model (section)

== Origin of the term ==
One theory on the origin of the concept comes from the decision to expand munitions before the US entered [[World War I]].<ref>{{cite web|url=http://political-economy.com/guns-or-butter/ |title=Guns or Butter |website=Political Economy |date=2011-11-24 |access-date=2016-01-23}}</ref> In 1914 the leading global exporter of [[nitrate]]s for [[gunpowder]] was [[Chile]]. Chile maintained neutrality during the war and provided nearly all of the US's nitrate requirements. It was also the principal ingredient of chemical fertilizer in farming.<ref>{{cite web |url=http://www1.american.edu/ted/nitrate.htm |title=Chile Nitrates Exports |work=Trade Environment Database |location=Washington, D.C.|publisher=American University |date=1994-03-09 |access-date=2016-01-23 |archive-url=https://web.archive.org/web/20160304055748/http://www1.american.edu/ted/nitrate.htm |archive-date=2016-03-04 |url-status=dead }}</ref> The US realized it needed control of its own supply. The [[National Defense Act of 1916]] directed the president to select a site for the artificial production of nitrates within the [[United States]]. It was not until September 1917, several months after the United States entered the war, that Wilson selected [[Muscle Shoals, Alabama]], after more than a year of competition among political rivals. A deadlock in the Congress was broken when South Carolina Senator [[Ellison D. Smith]] sponsored the National Defense Act of 1916 that directed "the [[United States Secretary of Agriculture|Secretary of Agriculture]] to manufacture nitrates for fertilizers in peace and munitions in war at water power sites designated by the President." This was presented by the news media as "guns and butter".<ref>Price Fiushback et al. (2007)  ''Government and the American Economy: A New History''. pp. 10, 435. </ref> Tax expert Albert Lepawsky stated in 1941, "Contrary to the popular slogan, it is not a question of guns versus butter" because basic food supplies will not be cut. He explained:

{{quote|Reducing non-defense consumption as a whole, however, may play fully as important a role as increasing the nation's production. Indeed, for the first World War, it was estimated by John M. Clark that while 13 billions came out of increased production, 19 billions were paid for by decreased consumption.<ref>Albert Lepawsky (1941). "Paying the Bill for National Defense". ''Taxes'' 19. p. 515.</ref>}}