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1.4 Second World War post-war affluence and growth., Change and shifts at…
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-Economy was good as people had confidence about 'the American way' as consumerism was partriotic.
However, it was not all steady economic growth as inflation and unemployment increased sharply for a year or so.
However, reasons for growth of suburbs is that people saw inner-cities as slum ridden.
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-The US Government lost its position as the world's most important exporter.
-its finances were being being drained by the Vietnam War.
-The balance between paper currency and gold was increasingly out of balance. The 1944 Bretton woods agreement had made the dollar the currency to be backed by the gold reserve.
-The government saw a problem with the gold reserve. In 1966 it slowed increasing of the money supply, there was an immediate downturn in the economy and inflation kept rising.
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-Federal spending was high to the returning soldiers from Vietnam + due to linking welfare payments to CPI in 1972-1974
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-Soaring fuel prices caused there to be dip in confidence in the economy as businesses stopped investing. This caused unemployment to rise from 5.8% to 7.1% in 1979.
-In July 1979 Carter addressed the nation, suggesting that the biggest crisis was a confidence crisis. However, people did not have confidence in his austerity measures so Reagan was voted in.
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IMPACT OF FUEL CRISIS
-Bad for car dependent Americans
-Created discontent as the government was seen as making matters worse by stockpiling
-Changed car buying habits as Americans went from gas-guzzling vehicles to more efficient Japanese ones.
