Economics Essay on the Postwar Prosperity

The people under analysis are American citizens by which business people had the fear that a decrease in government purchases might result in an economic depression that occurred in the 30s. The subject under discussion is Postwar Prosperity by which the authors highlight that the Americans experienced a period of prosperity after the war that extended until the 70s. The location, in this case, is America.

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The economic boom that took place after sixteen years experience of war and the Great Depression was driven by two forces. The reason for the prosperity is attributed to unrestrained consumer and business spending. The fear of communism was no longer relevant in this era (Davidson et.al 576).

The economic boom was received with various activities from the American consumers.

High wages from the war had stocked up in the bonds and saving accounts.

Consumers that were quite eager embarked on purchasing new vehicles, food, and appliances that were not present during the war.

There was an increase in employment and a drop of 1% of the gross income despite the governments expenditure on the war.

Also, the spending of the government in the federal, state and local levels also boosted prosperity in America.

Healthcare, education and government programs were the main industries exhibiting growth after the Second World War. According to the author, Equally important, the federal government poured billions of dollars into the military industrial sector. The defense budget, which fell to $ 9 billion in 1947, reached $ 50 billion by the time Truman left office. Over the longer term, these factors promoting economic growth became clearer (Davidson et.al 576). (Source: Davidson, James West, et al. U.S.: A Narrative History. Vol. II. 2d edition. New York: McGraw-Hill, 2012).

One of the results entailed hidden costs associated with the consumers in the nation. Synthetic products took route in the new economy with the view that they were affordable and made life easier. However, the idea of having a society where every person was employed in regards to mass consumption contained plenty of challenges. The products came from fossil fuels as hydrocarbons were mostly used in the manufacture of plastics and fertilizers. However, it was perceived that the demand resulted in the exhaustion or resources and resulted in more danger; with a good example being the atomic test that took place in Bikini Atoll that brought about immense radiation after the blasts. The second result entailed the post-war adjustments. After the war, a majority of the women and minorities lost their jobs to give way to the veterans. The employment during warfare provided women opportunities to take part in the job market resulting in economic independence. When the war came to an end, most women hoped to retain their economic independence. However, the return of the soldiers pushed them back to their traditional domestic duties. The new deal at bay was also another occurrence during the postwar prosperity (Davidson et.al 577).

Henderson describes the prosperity as the U.S. miracle. He explains that the decrease in government spending and deregulation of an economy strengthened the U.S. economy. He states, From the start of Americas formal participation in World War II with Congresss declaration of war on December 8, 1941, to its peak war production in 1944, the U.S. economy, by all appearances, boomed. Measured in 1954 prices, real GNP rose from $238.1 billion in 1941 to $317.9 billion in 1944, an increase of 33.5 percent. This increase translates to an average annual growth rate of 10.1 percent (Henderson 3). (Source: Henderson, David R. The U.S. Postwar Miracle. Working Paper, Mercatus Center: George Mason University, 10-67, 2010. file:///C:/Users/user/Downloads/Documents/U.S.%20Postwar%20Miracle.Henderson.11.4.10.pdf).

Henderson explains that two strategies led to the economic boom that includes; decrease in government spending and deregulation of an economy. Also, businesses began producing goods for the public instead of the government. The economy also shifted to surpluses while the war veterans received employment compensation (Henderson 2).

Henderson highlights loss of jobs as one of the results of the postwar prosperity by which most of the jobs were given to the returning troops. He explains that the government also decreased its spending, a change in government policy took place where America shifted from a centralized economy to a free economy in addition to price control from the government. He explains that the U.S. experienced an economic miracle because of the shift to a free economy from a central economy and the decrease in government expenditure (Henderson 4).

Higgs explains that after the Second World War, the U.S. emerged as the most powerful and richest country. As a result, the American leaders decided to establish a long-term policy of global military engagement in pursuit of perceived "national security." Higgs attributes the progress to the presence of a welfare state where the troops received employment compensations and hence contributing greatly to economic development (1). The enactment of the Civil Rights Act in 1964 also contributed to the progress whereby racial discrimination was abolished (Higgs 1). (Source: Higgs, Robert. Government and the Economy since World War II. Independent Institute Working Paper Number 58, 2005. file:///C:/Users/user/Downloads/Documents/58_government.pdf ).

The economic boom was received with various activities from the American consumers and the government. They include;

Establishment of welfare programs to assist the veterans and the disabled people in the society. A good example is the Community Action Program that focused on bringing the poor together and improving their incomes.

Banning racial discrimination such that people worked together in developing the economy

Enacting acts that allowed women to take part in economic development. A good example is the Equal Pay Act that was employed in 1963 for women to earn equal pay as men (Higgs 6)

According to Higgs, one of the results of the prosperity was increased employment capacities due to the new government policies that allowed women and the minorities to get jobs. Also, the citizens received adequate healthcare due to the introduction of Medicare that focused on assisting the poor. Another outcome was the development of a free economy as the government did not control all the businesses taking place in the country (Higgs 7).

The three resources align with the events that took place in the economy of the U.S. after the Second World War. They mention the aspects regarding employment opportunities, gender equality and the role of the government during the era. They highlight the impact of the First World War and the Great Depression before the U.S. finally got control of its economy. From a personal perspective, the three sources present a thorough analysis of the post-war era in America in regards to the effects.

The articles present detailed information regarding the post-war era but vary in terms of content. Higgs focuses more on the acts that were enacted during the era while Henderson and Davidson et.al focus on the role of the government and the impact that the era had on the American citizens. From a personal perspective, it is quite evident that the period brought about several changes in the U.S. from both social and economic perspectives. Gender and racial equality became points of focus in the achievement of progress in the U.S.

Works Cited

Davidson, James West, et al. U.S.: A Narrative History. Vol. II. 2d edition. New York: McGraw-Hill, 2012.

Henderson, David R. The U.S. Postwar Miracle. Working Paper, Mercatus Center: George Mason University, 10-67, 2010.

Higgs, Robert. Government and the Economy since World War II. Independent Institute Working Paper Number 58, 2005.