The United States of America: The World Economic Powerhouse 1917

USA GDP annual pattern and long-term trend, 1920-40, in billions of constant dollars, based on .... Novelty", in which ever-changing fashions and new models broadened the consumer ... In the 1960s, a civil rights revolution shook the nation.
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Lesson - The United States of America: The World Economic Powerhouse 1917-20.. [CA v2.0] Summary 1. From WWI to WWII (1917-1945)......................................................................2 1.1. The First World War (1917-1918) and its legacies....................................2 1.2. The Roaring Twenties (1920-1929)...........................................................3 1.3. The Great Depression (1929-1941)...........................................................5 1.4. The Arsenal of Democracy (1941-1945)...................................................7 2. From the Great Postwar Prosperity to the End of the U.S. Economic Domination? (1945-20..)......................................................................................9 2.1. The American Way of Life.........................................................................9 2.2. The Role of the Federal Government in the Economy.............................11 2.3. The End of the U.S. Economic Domination?............................................13

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1. From WWI to WWII (1917-45)

USA GDP annual pattern and long-term trend, 1920-40, in billions of constant dollars, based on data in Susan Carter, ed. Historical Statistics of America: Millennial Edition (2006) series Ca9 (src).

1.1.

The First World War (1917-18) and its legacies



The United States entered World War I in April 1917. Although the United States was actively engaged for only 19 months, labor and capital were quickly mobilized on an impressive scale. The armed forces increased from 179,000 in 1916 to nearly 3 million in 1918.



To pay for the war taxes were raised, the money supply was expanded, and billions of dollars worth of bonds were sold to the public. At the start of the war, the national debt was equal to 3 percent of gross domestic product (GDP); by the end of the war, the national debt was equal to 32 percent of GDP.



Scores of new agencies attempted to regulate prices, set priorities, and allocate resources. When the war ended, most wartime controls were abandoned. Nevertheless, the war provided a precedent for the federal government’s increased role in the economy.

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1.2. •

(src)

The Roaring Twenties (1920-29) After World War I, the American public hoped for a “return to normalcy,” as U.S. President Warren G. Harding put it. The Republican administrations of the 1920s generally looked to market forces to produce economic growth. After a severe but brief recession in 1920 and 1921, the economy moved into a long expansion.

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(src) •

A new American middle-class lifestyle emerged that relied on consumer durables, especially the automobile. Henry Ford's Model T, by far the most popular car sold in America in the first three decades of the 20th century, cost almost $1000 when it was first introduced in 1908. Thereafter the Model T's cost fell every single year, so that by 1927—the year it was replaced by the more modern Model A—it cost less than 300 bucks. Ford ultimately sold more than 15 million Model T's; during the 1920s the rate of automobile ownership increased from one car per fifteen Americans to one per five. The radio also brought new ideas and experiences into their own homes. Video:

Henry

Ford

and

the

Model

T

http://www.history.com/topics/henry-ford/videos#henry-ford-and-the-model-t •

The stock market surged, and the belief took hold that the economy had moved into a new era of continuous growth and prosperity that would eventually eliminate poverty.

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Large group of people filling out tax forms in Internal Revenue office, c1920 (src).

1.3. •

The Great Depression (1929-41) The stock market boom of the late 1920s was based on widespread expectations that a new age of continuous prosperity had dawned. The great crash of 1929 dashed [to dash : to hit something in a violent and forceful way] those hopes and ushered [to usher : to conduct to a place] in a severe economic contraction.

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(src) •

The Great Depression of the 1930s was a cataclysm of unparalleled magnitude. The banking system collapsed, farm prices fell, and industrial production plummeted. Real gross domestic product (GDP) fell 30 percent. Unemployment rose from 3.2 percent of the labor force in 1929 to 25 percent in 1933.



As a result of the depression, the federal government – with the New Deal - took a much larger role in the economic life of the nation. Regulation of the private sector and expenditures for social welfare increased. In 1929, federal spending amounted to 3 percent of the gross national product (GNP); in 1947, it amounted to 15 percent.



The nation’s financial system was changed radically as a result of the depression. Deposit insurance was introduced and the Securities and Exchange Commission (SEC) was set up to regulate the stock market.

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A Missouri family of five, California, 1937 (src)

1.4. •

The Arsenal of Democracy (1941-45) The attack on Pearl Harbor was a surprise military strike conducted by the Imperial Japanese Navy against the United States naval base at Pearl Harbor, Hawaii, on the morning of December 7, 1941. The attack led to the United States' entry into World War II.

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Aluminum paint production in this Midwest aluminum factory now converted to production of war materials. These workers are assembling 37mm armor-piercing shot (src).

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Rosie the Riveter as depicted by Norman Rockwell (1943) •

The "Arsenal of Democracy" was a slogan used by U.S. President Franklin D. Roosevelt, in a radio broadcast delivered on December 1940. America’s primary economic goal was to supply sufficient arms to her own military forces and to those of her allies to overwhelm the Axis (Germany, Italy, Japan, and their allies).



In a few short years, the factories of the United States were turning out more weapons than any other nation and more than all the Axis powers combined.

2. From the Great Postwar Prosperity to the End of the U.S. Economic Domination? (1945-20..) 2.1.

The American Way of Life



The American Way of Life: It's an expression that refers to the lifestyle of people living in the United States of America. The American Way of life is individualistic, dynamic, pragmatic.



The Consumer Society: We can identifies four American Dreams that the new consumer society addressed. The first was the "Dream of Abundance" offering a lot of material goods to all Americans, making them proud to be the richest society on earth. The second was the "Dream of a Democracy of Goods" whereby everyone had access to the same products regardless of race, gender, class, etc. The "Dream of Freedom of Choice" with its ever expanding variety of good allowed

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people to fashion their own particular lifestyle. Finally, the "Dream of Novelty", in which ever-changing fashions and new models broadened the consumer experience.

Former B-24 pilot, Ernest Beasley studies at Miami University (G.I. Bill, 1944). He has a modern flat on campus (1950). (src)

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Buy Nothing Day demonstration, downtown San Francisco, November 2000 (src)

2.2. The Economy

Role

of

the

Federal

Government

in

the

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(FY: Fiscal Year)

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The role of government continued to expand, especially during the first three decades of the postwar era. In 1950, federal spending amounted to 16 percent of GDP; by 1980, it amounted to 22 percent. However, a reaction to the growth of government set in. In 2007, federal spending was 20 percent of GDP. But, with the 2008 crisis it's growing again.



In the 1960s, a civil rights revolution shook the nation. Efforts were made through the government, and through affirmative action, to secure greater economic progress for women, African Americans, and other disadvantaged groups.

2.3.

The End of the U.S. Economic Domination?



In the 1970s, concern mounted as productivity growth slowed, inflation surged and troubling signs of deterioration emerged.



In the late 1970s and early 1980s, a neoliberal reaction to government involvement in the economy set in. The airlines, the banks, and other sectors were deregulated, and tax rates were cut.



In 2008 the United States suffered a deep financial crisis reminiscent of the start of the Great Depression.



The Rise of the People Republic of China:

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‘Rise of China’, The Spectator (Australia) cover (by Anton Emdin), October, 2010 ; The Panda is sucking an oil barrel Citizens Against Government Waste (CAGW), Chinese Professor, 2030 Beijing, 2010 [1 min.]