WWI vs WWII on consequent economic depression/growth

World War I

Economic Impact of World War I

When the United States entered the conflict in 1914, the economy was already at full employment. The United States sent 4 million men across the ocean which was a small amount of the current workforce. While the amount of men fighting was not significant the cost to the economy was still about $.2 billion. Coupled with other expenses, including transfer payments to other nations that would never be repaid, the total cost of World War I in was $32 billion dollars[2000 base year] (%52 of GDP).

Economic Legacies of World War I

• The new Economic Superpower
• Planning for the Future

The Roaring Twenties

Prosperity in America

• Failure is the first step towards success
• The Nouveau Riche
• A new technological age

Contributors to Success

• Increase in the savings rate
• Growth of new Industry
• The high standard of living wage

The Bull Market

• Lending on Margin
• The rise of big business
• Simply supply vs. demand
• Not logical

Data from http://www.measuringworth.com/DJA/result.php. It is a yearly average of the DJA.

Depression Strikes

Causes of the Depression

• Monetary factors
• Missing Workers
• Stocks return to Earth

Data from http://www.nber.org/databases/macrohistory/rectdata/08/m08084a.dat. Bureau of labor statistics was original source data.

Economic impact of the depression

• Reduced National income
• Reduced National savings
• Dollar devaluation
• Reduced Exports

A New War

Economic Help is on the Way

• The show must go on
• Growth of the Federal workforce
• Mobilizing for War
• Solutions to a problem

Data from Louis D. Johnston and Samuel H. Williamson, "The Annual Real and Nominal GDP for the United States, 1790 - Present." Economic History Services, October 2005, URL : http://www.eh.net/hmit/gdp/

The end of war

• Income equality returns
• Market to the World
• Continued Federal and defense employment

Post War Economy and the reasons for Success

• G.I. Bill
• Creation of FDIC
• Global integration
• Foreign Success

Conclusion

• More extreme business cycle swings
• A change in Landscape
• Growth of a power