49Aim: What Were the Postwar Problems in the US?

During a wartime period the economy usually booms, as the govt. spends more for war supplies and more jobs are created. After the war ends however, the govt. reduces its purchases, & factories lay off workers as demand decreases. However things were quite different after WW II.

FACTORS CAUSING ECONOMIC GROWTH AFTER WW II!

A. Demand for consumer goods unavailable during the war years.

B. Savings. During the war high employment, plus a shortage of consumer goods led Americans to save their money. In addition returning GI’s had their mustering-out pay. Americans had money to spend!

C. GI Bill made money available to returning veterans for homes, education, or starting businesses.

D. D. Demand for new homes as returning vets began to marry & quickly raise families. Builders such as William Levitt met this need with mass produced inexpensive homes, which could be purchased with small down payments. This created the modern US suburb!

However as a result of this increased demand, plus the removal of wartime price controls, prices soared, as did inflation! Strikes, for higher wages swept the nation! Congress responded by passing the anti-labor Taft-Hartley Act, which reduced the power of unions & gave the President the right to force workers back to work in essential industries for 80 days! President Truman attempted to pass his legislative package, which he called, the Fair Deal, which was similar to FDR’s New Deal. A largely unsympathetic Congress thwarted his proposals. However Truman did integrate the Armed Forces, & his civil rights plans would eventually lead to the Civil Rights Revolution of the 1950’s.

In international affairs the world was now faced with a new potential conflict as the Western democratic nations faced off against the communist nations led by the USSR. This period of tension, made worse by the development of nuclear weapons & sophisticated delivery systems, became known as the Cold War! Truman was determined to contain, or stop the spread of communism throughout the world!

The first test of this containment policy became known as the Truman Doctrine when the US offered massive military & economic aid to Greece & Turkey to prevent communists from taking over these two geographically vital nations, which controlled the entrance to the Black Sea!

In 1948 the Marshall Plan was created, which offered $13 billion in aid to Europe to revitalize their economies. In the same year the North Atlantic Treaty Organization (NATO), was created to counter a possible Soviet invasion of Western Europe.

The COLD WAR took a dangerous turn, when the Soviets imposed a blockade of Berlin, Germany’s largest city, which lay within the Soviet zone of occupation. This was a reaction to the other Allies merging their sections of Germany into one newly created nation to be called West Germany. Fear of Soviet aggression led the Western Allies to strengthen western Germany so that it could be used as a buffer against the USSR.

The Russians cut off Berlin to all outside traffic in an effort to force the Allies out of that divided city. However the Allies created an around-the-clock airlift of vital supplies into Berlin which saved the city. This “Berlin Airlift” was the first activity of the newly created Cold War, which was to last until the dismemberment of the Soviet Union in 1991!

At home fear of communists led to a new “Red Scare”. In 1949 the Soviets exploded their own atomic bomb & the US was shocked! How was this possible asked the US? The answer was that the Soviets had spies in Los Alamos, the secret labs in New Mexico, where the bomb was developed. In addition other research facilities had been infiltrated by spies who were supplying the Soviets with our military secrets! A wave of accusations & investigations by Congress swept the US, & many Americans were accused of being spies or communist sympathizers.

HOMEWORK: Read pgs.795 – 799. Do pg 794 ques. 3A&B. Do pg. 806 ques. 4 & pg 795 T&N ALL.