Look around. There are many more govt posters showing that during WW2 the govt taking away the resources caused a shortage of everything.
A wealth of them here:
http://www.flickr.com/photos/bpx/sets/72057594121519817/
Your father’s mistake is the common one of looking at only a small part of the picture. Yes, the screw makers get richer, [the same way war profiteerers do at wartime]. But everyone else gets poorer. This is because there is only so much to go around. If the metals are diverted to making govt screws, there is less left to make everything else. If the screw company uses more metals to make the screws missing from the private sector, then there will be less metal to make other things, like cars and refrigerators. Scarcity makes the price of things go up. The govt gobbling up resources makes them scarcer for everyone else.