4: Economic Transformation - Post-war prosperity

Question 1

Did they face economic troubles after WW2 as they did WW1?

Answer 1

No.

GDP grew 35% between 1941 and 1945.

Question 2

How much of the world’s income did America have?

Answer 2

They had only 7% of the population but 42% of its income.

Question 3

What was per capita income and how much higher was it compared to Britain?

Answer 3

$1,456.

This was 2x higher than in the UK.

Question 4

Was the state rolled back or did spending remain high?

Answer 4

Spending remained high (though declined slightly), reflecting a shift away from the more laissez-faire, conservative approach of the pre-war period.

1939: $9.4 billion
1945: $92.2 billion
1948: $36.5 billion

Question 5

What did states use money for?

Answer 5

Independent states used the money from federal govt to improve schools and infrastructure.

Question 6

Why did state spending increase astronomically in the 1950s?

Answer 6

The Korean War as well as the Arms Race against the USSR.

Question 7

What was a key contributor to the prosperity of the post-war period?

Answer 7

The GI Bill of Rights.

Question 8

What did the GI Bill of Rights provide to veterans?

Answer 8

It offered grants (state funded) so they could improve their education, start a business, or learn new skills.

Question 9

How many veterans took advantage of the GI Bill of RIghts?

Answer 9

8 million.

Question 10

What economic benefit did the GI Bill of rights provide to veterans who were looking for jobs?

Answer 10

They were to receive $20 per week.

However, only 20% of it was distributed as there were many jobs for them when they got home.

Question 11

What did university expansion, because of the Bill, lead to?

Answer 11

Many servicemen enrolling as the govt paid their fees.

The Uni of Syracuse trebled its number of students.

Question 12

What did the Bill offer in relation to homes, and what did this mean?

Answer 12

It offered low-interest home loans.

Thus, many servicemen and their families moved to the suburbs, leading to its expansion.

Question 13

Did unemployment spike after the war?

Answer 13

No, there were greater employment opportunities in many industries, such as the tobacco company which made vast profits, as well as the electrical goods industry.

Question 14

What was unemployment at in 1944 and then 1948?

Answer 14

1944: 1.2%
1948: 4%
Remained low despite the war finishing.

Question 15

Were people wasteful with their money?

Answer 15

No, many people saved and were more frugal due to memories of the Depression.
Consumption did rise but not until the late 40s when people became confident that there wouldn’t be enough crash.

Question 16

How was wealth distributed?

Answer 16

Unequally:

Cities in the south were often much poorer and needed to catch up.

Question 17

What stat demonstrates the inequality in wealth distribution?

Answer 17

In 1947, 33% of homes lacked running water.

Question 18

What stats show the growth in home ownership?

Answer 18

1950: 55%
1960: 62%

Question 19

What does this increase in home ownership demonstrate?

Answer 19

It highlights the strength and success of the economy for, after WW2, many families were renting; this was no longer the case.

Question 20

What demonstrates the USA’s growth to being a global superpower?

Answer 20

The USA produced 80% of the world’s cars, and 60% of its oil.

Question 21

Finally, what status did the US gain after the war?

Answer 21

They became the richest country in the world.

Question 22

After WW2, the US economy _____, leading to a ___-___ _____ and an increase in _________.

Answer 22

After WW2, the US economy soared, leading to a post-war prosperity and an increase in consumerism.