Chapter 17
Postwar Confidence and Anxiety
1945-1960
SECTION 1-AN ECONOMIC BOOM
Objectives
1.Describe how the US made the
transformation to a peacetime economy.
2.Discuss the accomplishments of President
Harry Truman and Dwight Eisenhower.
3.Analyze the 1950’s economic boom.
An Economic Boom
After WWII, many worried there would be renewed economic
depression.
-Felt could not produce enough jobs for all those returning from
the military
-Instead, had economic boom (longest period of economic growth
in American history)
-This growth fostered widespread sense of optimism about
nation’s future.
Focus Question
How did the nation experience
recovery and economic prosperity
after WWII?
The Nation Recovers From War
At end of WWII, August 1945, 12 million Americans in military
-factories churning out ships, planes, and tanks to fight war in
Pacific
-overnight need for huge numbers of military machine and war
focus came to end
-Washington cancelled defense contracts
-millions of defense workers lose their jobs
-wartime industries had to convert to peacetime needs
The Nation Recovers From War
American set out to enjoy fruits of peace
Truman responds to: “bring the boys home
for Christmas
-Starts “demobilization”
-July 1946 only 3 million remain in military
Americans happy war over but uneasy about
future
-poll in 1945 60% of Americans expected
earnings to fall
-”American soldier…worries sick about
postwar joblessness” reported by Fortune
magazine.
The GI Bill Aids Returning Soldiers
Granted veterans a variety of
benefits
-provided a year of unemployment
payments to those who could not
find work.
-financial aid for those attending
college
-government loans for those building
houses or started businesses
The GI Bill Aids Returning Soldiers
Had enormous impact on American society
-home loans to Vets fueled upsurge in
home construction
-led to explosive growth of suburbs
Greatest impact on education
-encouraged Vets to return or enter college
-eligible to receive $500 a year for tuition
-$50/month for living expenses
-$75/month if married
-8 million Vets eventually took advantage
of education benefits
A Baby Boom Fills Classrooms
Soldiers made up for lost time
-quickly married and had children
Americans had put off children because of
depression and war.
Now, confident bad times behind them
-started families
-population experts called this “baby
boom”
1957, peek of boom
-American baby born every 7 seconds
-4.3 million for the year
Between 1940 and 1955, US pop. Grew
27%, from 130 to 165 million
Converting From a Wartime Economy
Unemployment did not materialize
Depression did not return
Problems that did occur:
-experienced skyrocketing prices
-at wars end, federal gov. ended
rationing and price controls, which
had kept inflation in check
-Postwar rush to buy goods created
inflationary pressures (to much
money; to few goods)
-Prices rose about 18% in 1946 (beef
prices nearly doubled in a year)
The US Dominates the World
Economy
During Depression could not buy
goods desired
Economy improves during war, but
wartime restriction kept buying
down
End of war open floodgate to
consumer purchases
-demand soared
-businesses employed more people
-created cycle; people bought new
goods, more people employed, in
turn bought more goods
The US Dominates the World
Economy
US only developed nation untouched by
devastation
Had only 6% of world population
Produced 50% of world’s total output
Allowed Americans to enjoy higher
standard of living than any other nation
Technological Progress Boosts
Productivity
Economy benefitted from numerous
technological advances
-use of atomic energy from war
research
-use of computers increased
(businesses gradually depend on
them)
-worker productivity (rate at which
goods produced) improved due to
technology.
Government Spending Supports
Growth
Increase in government spending
helped economy
-outbreak of Korean War gov.
committed sign. part of budget to
defense spending
-military spending led to new tech.
development (plastics and new light
metal alloys)
Marshall Plan, initiated foreign
demand for US goods
Checkpoint Question
What did many Americans expect to
happen to the American economy
after WWII?
Truman Overcomes Huge Obstacles