Why was post-war American so prosperous?

Question 1

Wartime spending pt1

increasing spending power, increasing employment, increasing demand

Answer 1

• During WW2, government spending increased by $91billion
• Between 1941 and 45, the USA produced:
  86,000 tahnks
  296,000 aircraft
  15 million rifles
• The government spent $2.4 billion developing the atomic bomb

Question 2

Wartime spending pt2

Answer 2

• Roosevelt paid for the war by increasing taxes on the rich, not the poor. At the same time, the poor became richer:
  Prices increased by 28% but wages increased by 40%
• Unemployment fell to 2% in 1945

Question 3

Government action in 1944

Answer 3

• Roosevelt proposed an Economic Bill of Rights. This committed the federal government to providing:
• Full employment and fair wages
• Decent homes
• Security in old age
• Sickness benefit
• He also passed the GI Bill of Rights, this offered veterans:
• Grants to improve their education or set up businesses
• $20 per week while looking for work
• Low interest loans to buy homes

Question 4

Consumer spending pt1

Answer 4

• During the war, consumer goods were unavailable and people saved their money. After the war, the amount of money people had to spend rose by 17%
• Much of this wealth was spent on consumer goods:
  During the 1950s, the no. of cars rose by 51 million
  By 1960, there were 50 million TV’s in America
  New shopping centres were built: in 1945 there were 8 shopping centres, by 1960 there were 3,850

Question 5

Consumer spending pt2

Answer 5

• After the war, there was a boom in population:
  Between 1947 and 1960, the population rose from 141 million to 181 million
  This increased demand for baby clothes
• Builders developed techniques to mass produce houses. This reduced house prices, increasing sales of houses and furniture

Question 6

Economic Aid pt1

Answer 6

• Under the Marshall Aid scheme (1947), America gave $13 billion to Western European countries to help them recover from the war.
• This aid ensured that Western Europe remained loyal to America and didn’t fall to communism. Also ensured that USA could trade with Europe

Question 7

Economic Aid pt2

Answer 7

• Much of the aid from the Marshall Aid scheme was then spent on goods from the USA. By 1951:
  $3.4 billion had been spent on raw materials
  $3.2 billion had been spent on food, feed and fertiliser
  $1.9 billion spent on machines and vehicles
  $1.6 billion spent on fuel

Question 8

Military spending pt1

Answer 8

• In the context of the Cold War, America spent billions of dollars maintaining a military presence throughout Western Europe and Southeast Asia:
• In 1948, President Truman called for an additional $3 billion to be spent on the defence
• Defence spending rose again during American’s involvement in the Korean War (1950-53)

Question 9

Military spending pt2

Answer 9

• Army and navy bases were built in otherwise poor areas, such as the South. For example:
  Fort Hood in Texas
  Fort Lee in Virginia
• Many American universities and companies were given lucrative contracts to provide weapons, research and equipment:
  General Electric was awarded an $8 million defence contract
  Caltech (California Institute of Technology) was awarded $83 million for research