Booming Economy

Ordinarily, the outbreak results in a time of depression, panic, and gradual

recovery, especially a war of this great magnitude. Oddly enough, only a short while after

the outbreak of the Korean War the United States' economy was flourishing. Let us

investigate into the causes of this bizarre phenomenon.

American leaders turned the war around and used it as a stepping stone in the

process of revitalizing the "depression-plagued economy." The war effort itself caused

old factories to be reopened so as to produce necessary war time goods. The workers

themselves also felt a sense of duty to work as hard as humanly possible to help out the

war effort. These reopened factories and well motivated workers did not simply cease to

exist after the warm, they carried over and helped cause the abnormal economic boom.

A great deal of credit for the booming economy was military budget. The Korean

War and defense spending accounted for ten percent of the Gross National Product for the

following ten years. The pentagon provided money, which helped in technology fields

such as aerospace. Most of the financing for scientific research and development.

Another major factor in the United States' booming economy was the reduced

price of energy. America's domination of the oil industry was the major reason for this

deflation. In the twenty-five years following the outbreak of the Korean War the

American people doubled the amount of oil they used. Dozens if highways were built

(causing the overuse of oil in cars) and air conditioning became a household necessity.

Worker productivity increased dramatically after the Korean War outbreak. From

1950 to 1970 productivity increased at a rate of nearly three percent per year. The war

was not the only reason for the rise in productivity, the education level of workers was

also higher. With this fact in mind, the United States' work force was able to nearly

double its output from 1950 to 1970. As a result of this increase in productivity, the

standard of living was also nearly doubled in the 25 years following the war.

The final factor that caused the economic boom was the change in the nation's

economic structure. Family farms, which were a main part of the economy, were now an

extremely rare site. No longer was the farm run by manpower, it was now run by the

machine. In sixty years the productivity of one farmer increased from being able to feed

fifteen to being able to provide for fifty people.

As you can see the end of one war and the outbreak of another was exactly what

the doctor ordered for the refreshing of the economy. This may sound like a rather

strange comment to make, but as you can see it is backed up by fact.