13-1An Economic Boom

Warm-Up – What’s a Boom?

Economic?Baby?

The Nation Recovers from War

• Almost overnight the need for military and war good ends.

• Millions of workers lose jobs.• Demobilization – bringing home the

military

• GI Bill of Rights – veteran benefits – one year unemployment pay if unable to find work, financial aid for college, government loans for housing and businesses.• Helped home construction• Growth in suburbs• Increase in college students

• Returning soldiers married and had families = Baby Boom – increase in births between 1845-1964.

• Economic problems inflation (included skyrocketing price)s when rationing ended. Postwar rush to buy goods that were not available during the war. Too much money to spend (made good money but could not buy anything during the war)

US dominates World EconomyConsumer purchases increase – demand increases.

Demand for goods

increases

Businesses employ more

people to make goods

People making

money so they buy

more goods

Businesses hire more workers

More people making

money so they buy

more goods

US only developed nation not devastated by war producing 50% of output of goods!

Technology Progress Boosts Productivity

• Numerous technological advances• Atomic energy• Use of computers

Worker productivity improves as a result of technology.(the rate at which goods are produced)

Government Spending Supports Growth• Defense Spending

• Korean War – US again spends money on military• Leads to development of new technologies and new materials

• plastics• New lighter metal alloys

• Marshall Plan (aid to Western Europe post WWII) leads to increase in foreign demand for goods

CHECKPOINT

What did Americans expect to happen to the American economy after WWII?

Truman Overcomes Obstacles• One of the more difficult times in US history

• Beginning off the Cold War• Communist take-overs in Europe and Asia

• Civil Rights• Angers segregationists when he establishes a committee to

investigate race relations• Desegregates the military

• Inflation in US• Labor unrest in US

• Trade unions want pay increases – steel, coal, railroad, and auto strikes

• Taft-Hartley Act – outlaws a “closed shop” where only union members can be hired.

Truman upsets Dewey

Wro

ng!

• 4 parties ran in the election of 1948• Truman (Democrat)• Dewey (Republican)• Thurmond (State’s Rights) Southern Democrats upset by civil rights • Wallace (Progressives) Democrats upset on foreign policy

Truman won by a narrow victory

Fair Deal

Truman’s program that would strengthen New Deal Programs (from Roosevelt) and establish new programs like national health insurance.

Failed to win Congressional approval for most of Fair Deal proposals

Checkpoint

Why were workers dissatisfied during the postwar period?

Eisenhower’s Middle PathWanted by both Democratic & Republican Parties

• Friendly, reassuring• Calm personality = “middle road” in liberal/conservative• record of service and honesty• Military background

liberal Conservative

Fed government

too large

Not repealing New Deal

programs like SS and min wage

Created interstate highway system & spent federal dollars on education for scientists

His Presidency = Prosperous, peaceful, and politically tranquil in 20th century

Check Point

Why did federal spending increase during Eisenhower’s presidency?