American Economy Booms after World War II
After World War II, the American economy hummed along. There were plenty of jobs for returning servicemen. There was also the G.I. Bill of Rights, which passed Congress in 1944 and provided veterans more than $13 billion in the decade after the war for college tuition, vocational training programs, or money to start a business. Perhaps most important, the bill offered vets no-money-down, low-interest loans to buy homes.
Thanks to a $6 billion tax cut and all the savings from buying bonds during the war, Americans had plenty to spend. The high consumer demand for goods triggered high inflation — 14 to 15 percent the first two years after the war for goods in general, and a painful 25 percent for food.
Such high costs in turn triggered a lot of labor unrest, with 5,000 strikes in 1946 alone, and major troubles in the coal and rail industries. President Truman reinstated wartime price controls to deal with inflation, and the Republican Congress passed a bill called the Taft-Hartley Act in 1947 that restricted labor union power.
By 1949, the economy had adjusted to the ending of the war, and the country entered an almost unprecedented economic boom. From 1945 to 1960, the Gross National Product (the amount of goods and services produced) increased from $200 billion to $500 billion per year. Thousands of smaller companies merged or were gobbled up by large corporations. So were many family farms, by large “company” farms.
The economy wasn’t the only thing growing. The birthrate boomed as men and women pushed apart by the war made up for lost time. The population grew 20 percent in the 1950s, from 150 million to 180 million, and the generation born between 1946 and 1964 became known as the baby boomers.
Along with the economy and the population, Americans’ appetite for the good life (the number of private cars purchased doubled in the 1950s) and the perceived need to “keep up with the Joneses” also grew.