Through the 1920s, the farmer was the sick man of the American economy.

Each
year saw more farmers going into tenantry, until by 1929 four out of 10 farmers in
the nation were no longer independent operators. Each year the farmer seemed to
fall further behind the city dweller in terms of relative well-being. In 1910, the
income per worker on the farm had been not quite 40 percent of that of the nonfarm
worker; by 1930, it was just under 30 percent. (source pg. 93 making of an
economic society)

Although there were many attempts made by President Herbert Hoover to keep the
economy moving again all were for naught from the Administration claimed to be
responsible for the Great Depression.

It was President Franklin D. Roosevelt, won by a landslide vote against Hoover, who
reopened the Banks in late March 1933. The new Presidents response was
immediate and vigorous: In the 3 months after Roosevelts inauguration, writes
Arthur Schlesinger, Congress and the country were subjected to a presidential

barrage of ideas and programs unlike anything known to American history. This
was the famous Hundred Days of the New Dealthe days in which, half by design,
half by accident, the foundation was laid for a new pattern of government
relationship to the private economy, a pattern that was to spell a major change in
the organization of American capitalism ( source : pg. 101 making of an economic
society). During his term he sent a flurry of bills and created programs that put
millions of Americans back to work. Although many were unemployed still output
began to rise reaching the same level as those in 1929. The big reason for this New
Deals success was the massive federal government spending for work programs.
This huge injection of dollars into the economy was certainly the cure and just what
the nation needed.
Just as it looked as though the Depression is finally over it plunged right back into it
again. The reason being with the economy rising, the natural courses of action was
to balance the budget at all costs and to tighten credit to avoid inflation, these will
prove to be disastrous as the nation would experience the sharp recession of 193738. Although the economy was rising the major player for the recession was an
unemployment rate of 12 percent, prescribed with balanced budget and tight
money.
The nation was again experiencing rising unemployment and falling production but
this time it was temporary. In April 1938, the Roosevelt Administration and the
Federal Reserve Board hastily began to stimulate the economy rewarded by an
expansion that would continue for 7 years. The outbreak in the war with Europe with
America mobilizing its army in 1940 and 1941 and its eventual entry into the war in
December 7, 1941 propelled the nation to full recovery. It was clear what brought
the United States from the Great Depression: the massive government spending
that was needed to prepare and fight World War II. The country that emerged from
the war was quite different. Prosperity had replaced depression. Inflation is the
number one concern.
The 1940s: World War II and Peacetime Prosperity
World War II was the main event of the 1940s especially the day the Japanese
bombed Pearl Harbor until their surrender in August 1945. For the first time in its
history the nation fought a war that required a total national effort.
At the peak of the war more than 12 million men and women were mobilized
causing the unemployment rate to fall below 2 percent. With the majority of the
population participating the war, companies would hire just about anybody. But
thanks to this, the country mass produced 300,000 airplanes, over 100,000 tanks,
and 88,000 warships.
Between 1939 and 1944, national output doubled. By the middle of 1942, the
American economy reached full employment for the first time since 1929. During
the war, 17 million new jobs were created while the economy grew. The trademark
of the nation as an Industrial might proved the decisive factor in winning World War
II. The Japanese and Germans were overwhelmed as the United States accounted
for half the worlds manufacturing output.

In 1945, only two superpowers were left standing the United States and the Soviet
Union. The cold war then developed in which billions were spent aiding the sagging
economies of Western Europe and Japan and another billions for their defense, by
this the Soviet Union collapsed in 1990-91.
Once the war was over, very little housing had been built and there was a preceding
depressed postwar period so many veterans were overcrowded in houses and
apartments. The federal government answered to this call by supplementing these
veterans with affordable mortgages and new houses built in the suburbs. In 1945,
little land was available so suburbanization was inevitable. Highways would be built
for easy access to these suburban housings. Hence the late 1940s and 1950s were
one big construction boom. This construction boom would provide millions of jobs.
By this time the automobile industry was up and running again making America the
worlds leading auto exporter.
In 1944, Congress passed the GI Bill of Rights which offered veterans not only
mortgages but also help with educational costs. The GI bill made college affordable
and was responsible for enrollments more than doubling between 1940 and 1949.
The 1950s : The Eisenhower Years
In the early 1950s the economy was stimulated by the advent of televisions and the
Korean War. General Dwight D. Eisenhower, one of the great heroes of World War II,
was elected president. He made good on his promise of ending the war on Korea
and ending the inflation of the Second World War. Three recessions occurred during
his presidency. What was most significant during his term was how he did not undo
the legacies of the New Deal like the Social Security and other regulatory reforms
established. The role of the federal government as a big economic player was
permanent. By the end of the decade, America was a suburban nation. By 1960, all
homes had at least one set of TV.