Both World War I and World War II had extensive and lasting effects on the American economy. Both wars devastated the countries involved, invoking billions of dollars in damage (Fagnilli 26). Although the war was not fought on American soil, the United States still felt the aftermath of the war. In each circumstance, the American economy underwent a slight drop, then immediately skyrocketed due to a number of factors including slow manufacturing transitions and consumer spending (Fagnilli 26).
World War I ended in 1918, costing America a total of $25 billion, the U.S. was in major debt (Phillips). The economy was suffering because oodles of production companies have to switch back from “guns to butter” (Fagnilli 26). For example, Ford Motor Company produced …show more content…
In total the United States spent $330 billion on the war (Fagnilli Notes: Impact of the War), putting the United States even deeper in debt. Adding onto the economic issues, the United States had to cut $35 billion in war production contracts (Fagnilli 26), forcing one million Americans into unemployment. Also, like World War I, production had to shift from “guns to butter”, and along with the production shift, jobs shifted from “blue collar” to “white collar” (Fagnilli 26). Because of the job shift, more Americans were making more money, increasing quality of life and consumer spending ability (Fagnilli 26). In total Americans saved $135 billion during the course of the war, partially due to government rationing (Fagnilli 26). So, when the war was over, Americans went on a spending spree (Fagnilli 26). They bought cars, houses, and other consumer goods. Feeding this money into the economy caused it to grow drastically in the decade following World War II (Fagnilli 26). Like World War I, the economy after World War II seesawed during the post war time with positive and negative stages in the economy, but the economy regained its balance over
World War I ended in 1918, costing America a total of $25 billion, the U.S. was in major debt (Phillips). The economy was suffering because oodles of production companies have to switch back from “guns to butter” (Fagnilli 26). For example, Ford Motor Company produced …show more content…
In total the United States spent $330 billion on the war (Fagnilli Notes: Impact of the War), putting the United States even deeper in debt. Adding onto the economic issues, the United States had to cut $35 billion in war production contracts (Fagnilli 26), forcing one million Americans into unemployment. Also, like World War I, production had to shift from “guns to butter”, and along with the production shift, jobs shifted from “blue collar” to “white collar” (Fagnilli 26). Because of the job shift, more Americans were making more money, increasing quality of life and consumer spending ability (Fagnilli 26). In total Americans saved $135 billion during the course of the war, partially due to government rationing (Fagnilli 26). So, when the war was over, Americans went on a spending spree (Fagnilli 26). They bought cars, houses, and other consumer goods. Feeding this money into the economy caused it to grow drastically in the decade following World War II (Fagnilli 26). Like World War I, the economy after World War II seesawed during the post war time with positive and negative stages in the economy, but the economy regained its balance over