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The us economy since wwii


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Economic overview

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The us economy since wwii

  1. 1. Economic Basics WWII & Beyond
  2. 2. Economic Basics • study of production & distribution of goods & services -micro=small consumer/ind. Markets -macro=big picture/whole econ • principle of scarcity -how to satisfy unlimited wants with limited means • factors of production -land; capital; labor; entrepreneurs • opportunity cost -cost of an economic decision
  3. 3. Trends • recession -part of business cycle -occurs with drop in spending -try to get people to spend -increase money supply -increase gov’t spending -lower taxes • depression -not part of cycle -long term downturn in activity -high unemployment -price deflation • stagflation -combo “stagnation” & “inflation” -high inflation -high unemployment
  4. 4. Deficit v. Debt • deficit -difference between $ gov’t takes in and what gov’t spends each year • debt -accumulated deficits -at interest -currently $16.3 trillion
  5. 5. Approaches • Supply-Side Economics -tax cuts for the wealthy -increased investments stimulate economic growth • Keynesian Economics -government spending to stimulate economy -New Deal
  6. 6. World War II • Fed. gov spends $350 billion -twice total of all US history -40% taxes/rest bonds • work force –grows 20% • GNP (total goods & services) -doubles ‘39-’45 Post War Problems • Inflation -few consumer goods -$140 billion in savings • Strikes for higher wages -no raises during war -overtime less available
  7. 7. Righting the Ship • GI Bill – loans -business, home & college • Taft-Hartley Act -anti-union -passed over veto •‘45-’60 – US 6% of world pop. -prod. 50% of manu. goods • military-industrial complex -permanent war economy