I just can’t understand how the Golden Age in USA emerged after the World War 2. Although they “won” the war, they spent billions of dollars on their military and on the Marshall plan to assist and to restore the economic infrastructure of many countries in Europe.
EDIT: There are some comments mentioning that the USA didn’t get bombed during the WW2. I know that, but USA has never gotten bombed. Why did it happen right after the WW2 and not later?
In: Economics
For one, the fact that this was a “golden age” is something of a myth. Rates of poverty and all sorts of economic metrics point to this being a much worse time than later periods, including today.
Regardless, the post-war economic growth emerged from several factors:
* The most important is that the US was the sole industrialized country that wasn’t bombed.
* military investment in US industry was very quickly put to civilian use. Car factories were repurposed to make tanks and planes and then very quickly retooled to make cars, again, for example
* Much of the war spending was financed by what was essentially forced savings. There was a huge savings glut that was spent down in the years after the war
* federal spending, particularly on infrastructure, was even higher as a fraction of GDP than it was during the new deal, which was massively higher than anything that came before.
As an aside, the Marshall plan was about 0.5% of US GDP.
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