The decade before World War Two is widely considered the worst economic period in the history of The United States. The Great Depression began in 1929 and lasted until 1933, and during this time period U.S. Gross Domestic Product (GDP) fell by roughly 50% and unemployment rose as high as 25%.
The years between the Great Depression and WWII are called the New Deal Era. The New Deal was President Roosevelt’s attempt to help the economy recover from the Great Depression. Despite a diverse and extensive selection of government programs implemented to facilitate economic growth, unemployment remained around 17% and GDP still did not reach pre-depression levels.
After a full decade of economic turmoil, the United States entered WWII, and along with it, a period of rapid economic recovery. Over the course of the war, GDP skyrocketed to $223.1 Billion (more than double pre-depression levels) and full and healthy employment was achieved. In many ways, World War Two was a savior of the United States’ economy.
Upon entering the war, the United States’ government implemented a series of wartime policies that would help us win the war. Among these policies were; high taxes, the ban of durable good production (things like cars, houses, and household appliances) in order to focus on producing goods for the military, rationing of food, clothing, gasoline and other goods to ensure soldiers had enough, and price and wage controls to help prevent inflation. These policies were extreme, and caused inconvenience and discomfort for many American people, but ultimately were a tremendous factor in not only winning the war, but reviving the economy.
Another leading cause of America’s success during the war was the patriotism of American families on the home front. Many men, women and children took on a largerworkload or tougher jobs to help the war effort. Because of the ban of durable good production, housing was in limited supply, so families had to double and triple up in single family homes. American’s at home suffered through the harsh government policies because they knew that by doing so they were helping the war effort.
In some ways, family life, at least economically, was improved very quickly as a result of entering the war. Within a year of entering the war, full and healthy employment was reached. This means that the entire American workforce had jobs. In fact, there were so many war jobs that in industrial areas of the country, companies sent out sound trucks to drive through the streets asking people to come work. Savings rates were also at an all time high during the war. This is attributable to the extensive war bond advertising done by the government, as well as the lessons learned during the Great Depression.
Despite rapid economic recovery, there were still many economic difficulties faced by families during thewar. Income taxes were raised to unprecedented levels, with the top bracket paying between 81 and 94% throughout the war. Not only were taxes raised, but the income to be in the top bracket was dropped from $5 million a year to $200,000 a year. Along with these high taxes, many common household goods were rationed, causing people to have to make due without as much as they might have liked or could have afforded.
There were many economic ups and downs for families during WWII, but in the end, the war was the biggest factor in America’s economic recovery. The Great Depression forced the United States to its knees, and World War Two is what helped us back up and made us the thriving superpower that we remain today.