Why did the economy grow so rapidly during the 20s?

Answer 1

Because the stock marketwas rapidly rising and because Ford and other companies were paying their workers higher wages, so that they'd buy their cars.

Jcrobo5

(J krobo)

I read this in my history class in school.

Answer 2

The American economy soared from 1950 to 1970. One of the reasons why the economy soared is because of the Marshall Plan. This plan was based on rebuilding Europe and all the manufacturing for it came from the US. This is the reason why almost everyone had a job back then.

Answer 3

Postwar Economic Anxieties

During the 1930s, unemployment and insecurity had pushed up the suicide rate and decreased the marriage rate. The population growth was also declining as couples had economic troubles.

In the initial postwar years, the economy struggled; prices elevated 33% from 1946-1947 after the wartime price controls were removed. An epidemic of strikes swept over the country in 1946.

In 1947, the Republican Congress passed the Taft-Hartley Act over President Truman's veto. It outlawed the "closed" (all-union) shop, made unions liable for damages that resulted from jurisdictional disputes among themselves, and required union leaders to take a noncommunist oath. Taft-Hartley was just one of several obstacles that slowed the growth of organized labor in the years following WWII.

The CIO's "Operation Dixie," aimed at unionizing southern textile workers and steelworkers, failed in 1948 to overcome lingering fears of racial mixing.

Congress passed the Employment Act in 1946 to promote maximum employment, production, and purchasing power. It also created a 3-member Council of Economic Advisers to provide the president with the data and the recommendations to make that policy a reality.

The Servicemen's Readjustment Act of 1944, better known as the GI Bill of Rights or the GI Bill, made generous provisions for sending the former solders to school. By raising educational levels and stimulating the construction industry, the GI Bill powerfully nurtured the long-lived economic expansion that took hold in the late 1940s.

The Long Economic Boom, 1950-1970

In the 1950s, the American economy entered a twenty-year period of tremendous growth. During the 1950s and 1960s, national income nearly doubled, giving Americans about 40% of the planet's wealth. The post-World War II era transformed the lives of a majority of citizens and molded the agenda of politics and society for at least two generations. Prosperity underwrote social mobility; it paved the war for the success of the Civil Rights Movement; it funded new welfare programs; and it gave Americans the confidence to exercise unprecedented international leadership in the Cold War era.

The size of the middle class doubled from pre-Great Depression days, including 60% of the population by the mid 1950s.

The majority of new jobs created in the postwar era went to women, as the service sector of the economy dramatically outgrew the old industrial and manufacturing sectors.

The Roots of Postwar Economy

The economic upturn of 1950 was fueled by massive appropriations for the Korean War and defense spending. The military budgethelped jumpstart high-technology industries such as aerospace, plastics, and electronics. Cheap energy also fueled the economic boom. American and European companies controlled the flow of abundant petroleum from the expanses of the Middle East, and they kept prices low.

Gains in productivity were enhanced the rising educational level for the work force. By 1970, nearly 90% of the school-age population was enrolled in educational institutions.

The work force shifted out of agriculture, which was achieving higher productivity gains as a result of new, more efficient farming equipment.

The Smiling Sunbelt

In the 30 years after WWII, an average of 30 million people changed residence every year. Families especially felt the strain, as distance divided them.

The "Sunbelt", a 15-state area stretching from Virginia through Florida and Texas to Arizona and California, increased it population at a rate nearly double than that of the old industrial zones of the Northeast (the "Frostbelt"). In the 1950s, California alone accounted for 1/5 of the nation's population. The modern pioneers came in search of jobs, better climate, and lower taxes. The large amount of federal dollars being given to the Sunbelt states accounted for much of the Sunbelt's prosperity. The industry region of the Ohio Valley (the "Rustbelt") was especially hit hard as a result of the loss in funds and population.

The Rush to the Suburbs

In all regions, America's modern white migrants moved from the city to the new suburbs. The Federal Housing Administration(FHA) and Veterans Administration (VA) made home-loan guarantees, making it more economically attractive to own a home in the suburbs rather than to rent an apartment in the city.

"White flight" to the suburbs and the migration of blacks from the South left the inner cities, especially those in the Northeast and Midwest, to become poverty-stricken. The FHA often refused blacks home mortgages for private home purchases, thus limiting black mobility out of the inner cities.