Post – War America

Post-war Government policies Task 1 Post-war Government policies on GIs Causes of Prosperity Cold War Spending World War Two Complete this spider diagram as we work through the lesson – ensure that you add some key facts, dates and terms

America in WW2 Of all the countries fighting in World War 2, the USA was the only one that emerged economically stronger. The war effort ended unemployment – only 1.2% remained without work – an astounding figure. Even farmers began to enjoy better times as they exported food for the first time in 20 years. More than half a million businesses started up during the war.

America in WW2 The War Production Board was set up in 1942. This allowed US companies to choose what they would produce during war – instead of consumer goods, for example: General Motors produced heavy guns Chrysler produced tanks and anti-aircraft guns. This created another ‘cycle of prosperity’ as thousands of companies were needed to make the goods.

Click here for a slightly exaggerated view of Coca Cola in WW2 America in WW2 Coca-Cola set up plants to follow troops around the world – in the process making it the most successful soft drink in the world. Wrigley's packaged rations for armed forces – adding it’s chewing gum to the packs! Click here for a slightly exaggerated view of Coca Cola in WW2

America in WW2 Hence, millions of jobs were created by the war: 16 million men & women in armed forces. 14 million worked in factories Many women and black Americans gained jobs that they couldn’t have hoped for previously to the war. By the end of the war, the US had 7% of the world’s population, but 42% of it’s income & 50% of the world’s manufacturing output.

Post war spending Most Americans had been working hard during WW2 and earning good money. But because the USA was mainly making military goods, there was little for people to spend their hard earned money on. By the end of WW2 in 1945 they had money in the bank. After the war they were eager to spend it…

“If you are going to try to go to war…in a capitalist country you’ve got to let business make money out of the process or business won’t work.” Henry Stimpson, US Secretary for War, 1941 A Secretary for War works for the US Government. WW2 and US Businesses What does the above quote mean? Explain what it means, linking to your own knowledge. Is this interpretation a completely trustworthy view? Explain why you might have some concerns.

Post-war Government policies on GIs When war ended – many in their jobs feared another depression. GIs (General Infantry) feared there would be no work for them. Those who had worked in wartime industries feared they would face unemployment. But unlike the 1930s, the government had a strong economy and could ensure growth continued. Think/Pair/Share – what do you think the Government did to stop unemployment?

Reconversion – the transition from wartime production to manufacturing consumer goods – ensured that companies continued to grow for 25 years. This allowed the Government to invest further to help GIs.

The Serviceman’s Readjustment Act of 1944, the “GI Bill of Rights” put $15 billion into the hands of veterans to attend college, receive medical treatment, receive unemployment allowance and purchase homes. This was followed by a $6billion tax cut in 1945. Combined with war time profits, the economy was stimulated and businesses could invest in new factories, creating jobs. This meant women could now have new jobs in the growing businesses, as secretaries, clerks and shop assistants.

Cold War Spending With the end of the war, military spending went from $76 billion to under $20 billion in 1946. This would have led to a loss in jobs and prosperity from related industries. However, the beginning of the Cold War soon solved this problem.

Cold War Spending The Cold War was given this title since there was no actual direct fighting between the two main countries – USA & USSR. You don’t need to understand the details, but essentially, the US favoured one style of running the country – Capitalism. The USSR (Russia today) favoured a different approach – Communism. American’s, and their President, Truman, feared that the USSR was growing in it’s influence on the world. Look at the map – do you think Truman had cause for concern? In 1946, Truman attended a conference in which Winston Churchill famously claimed that an “Iron Curtain” had been drawn across eastern Europe. What do you think he meant by this?

Cold War Spending In 1947, Truman himself gave a famous speech, known as the ‘Truman Doctrine’ in which he promised US support to any country threatened by communism. He soon asked for $400m to help support Turkey from Soviet pressure. This was swiftly followed by the announcement of the Marshal Plan, which would help 16 European nations recover from War.

Cold War Spending In 1947, Truman himself gave a famous speech, known as the ‘Truman Doctrine’ in which he promised US support to any country threatened by communism. He soon asked for $400m to help support Turkey from Soviet pressure. This was swiftly followed by the announcement of the Marshal Plan, which would help 16 European nations recover from War.

Cold War Spending By committing to the Cold War, Truman ensured that military spending in the US suddenly increased- back to around $60billion by 1949. This state of permanent readiness for war created a ripple effect and meant much of the profits from WW2 and post war production was reinvested into America, creating jobs and prosperity.

Post-war Government policies How does your look? Post-war Government policies on GIs Reconversion allowed companies to quickly convert back to producing consumer goods, creating jobs and confidence. Men & women gained jobs in new businesses & industries. Serviceman’s Readjustment Act of 1944 ensured returning soldiers didn’t become unemployed. $6 billion tax break also benefitted Americans. Causes of Prosperity Cold War Spending World War Two Unemployment down to 1.2% War Production Board allowed US Businesses to profit from war-time production. 30 million Americans employed through military – many saved their income as no consumer goods to purchase during the war. The beginning of the Cold War – launched via the ‘Truman Doctrine’ meant US spending remained high going into the 1950s. This in turn created jobs in related industries.

http://economics.about.com/od/useconomichistory/a/post_war.htm