13-1 An Economic Boom Warm-Up – What’s a Boom? Economic? Baby?

The Nation Recovers from War Almost overnight the need for military and war good ends. Millions of workers lose jobs. Demobilization – bringing home the military GI Bill of Rights – veteran benefits – one year unemployment pay if unable to find work, financial aid for college, government loans for housing and businesses. Helped home construction Growth in suburbs Increase in college students

Returning soldiers married and had families = Baby Boom – increase in births between Economic problems inflation (included skyrocketing price)s when rationing ended. Postwar rush to buy goods that were not available during the war. Too much money to spend (made good money but could not buy anything during the war)

US dominates World Economy Consumer purchases increase – demand increases. Demand for goods increases Businesses employ more people to make goods People making money so they buy more goods Businesses hire more workers More people making money so they buy more goods US only developed nation not devastated by war producing 50% of output of goods!

Technology Progress Boosts Productivity Numerous technological advances Atomic energy Use of computers Worker productivity improves as a result of technology. (the rate at which goods are produced)

Government Spending Supports Growth Defense Spending Korean War – US again spends money on military Leads to development of new technologies and new materials plastics New lighter metal alloys Marshall Plan (aid to Western Europe post WWII) leads to increase in foreign demand for goods

CHECKPOINT What did Americans expect to happen to the American economy after WWII?

Truman Overcomes Obstacles One of the more difficult times in US history Beginning off the Cold War Communist take-overs in Europe and Asia Civil Rights Angers segregationists when he establishes a committee to investigate race relations Desegregates the military Inflation in US Labor unrest in US Trade unions want pay increases – steel, coal, railroad, and auto strikes Taft-Hartley Act – outlaws a “closed shop” where only union members can be hired.

Truman upsets Dewey 4 parties ran in the election of 1948 Truman (Democrat) Dewey (Republican) Thurmond (State’s Rights)Southern Democrats upset by civil rights Wallace (Progressives)Democrats upset on foreign policy Truman won by a narrow victory

Fair Deal Truman’s program that would strengthen New Deal Programs (from Roosevelt) and establish new programs like national health insurance. Failed to win Congressional approval for most of Fair Deal proposals

Checkpoint Why were workers dissatisfied during the postwar period?

Eisenhower’s Middle Path Wanted by both Democratic & Republican Parties Friendly, reassuring Calm personality = “middle road” in liberal/conservative record of service and honesty Military background liberal Conservative Fed government too large Not repealing New Deal programs like SS and min wage Created interstate highway system & spent federal dollars on education for scientists His Presidency = Prosperous, peaceful, and politically tranquil in 20 th century

Check Point Why did federal spending increase during Eisenhower’s presidency?