Economic impact of WW2 and post-war developments

The Economic Impact of WWII on the USA (1941-1945)

WWII ended the Great Depression and ignited a period of economic prosperity in the USA.
The USA became an “arsenal of democracy”, providing weapons and supplies to the Allied forces, thereby boosting manufacturing and employment.
Many Americans went to serve in the war, leading to labour shortages at home. This was filled by women and minority groups, leading to societal change.
Rationing and price controls were introduced due to the demands of the war economy.
During the war, national debt increased significantly due to the heavy borrowing necessary to finance the war effort, creating economic implications for the post-war era.

The end of the war saw a boom in consumer spending, as people who had been saving during the austerity of the war years now had money to spend.
The G.I. Bill of Rights (1944) provided returning veterans with benefits, including loans for houses and for starting businesses. This fostered economic development and fuelled the growth of ‘Suburbia’.
After the war years, the birth rate skyrocketed. This period of increased birth rate is referred to as the ‘Baby Boom’.
The rapid population growth led to increased demand for consumer goods, healthcare, and education, giving a significant boost to the economy.

The post-war period is often referred to as the ‘Golden Age of Capitalism’ as it saw unprecedented economic growth and prosperity in the USA.
Technological advancements in sectors such as automobile, aviation, telecommunications, and electronics fuelled economic growth and development.
During this time, the USA saw the expansion of middle-class, home ownership, a booming stock market, and the establishment of Social Security.
The Marshall Plan and founding of international institutions like the World Bank and IMF further established the USA’s economic dominance globally.

The Employment Act of 1946 committed the federal government to ensuring economic growth and stabilising post-war inflation.
The Federal-Aid Highway Act of 1956 led to the development of a vast interstate highway system, stimulating economic growth and making the transportation of goods easier and more efficient.
Post-War USA saw the growth of the ‘Military-Industrial Complex’, with defense industries playing a significant role in the economy.