- The Greatest Small City To Live InPosted 118 days ago
- Paid Vacation Time Doesn’t Equal Job SatisfactionPosted 118 days ago
- Stay Motivated At Work With These 6 TipsPosted 119 days ago
- Will The Virtual ER Be A Time And Money Saver?Posted 119 days ago
- Car Makers Will Have To Provide Free Recall InformationPosted 119 days ago
- Advice On Back-To-School Laptop ShoppingPosted 119 days ago
- It Will Cost Over $200k To Raise A Kid Born Last YearPosted 119 days ago
- Household Debt Declines By $78 BillionPosted 119 days ago
- Can You Convert The Traditional IRA To A Roth IRA?Posted 119 days ago
- Scoreless Millions Aren’t That Risky At AllPosted 119 days ago
Modern American Financial History
The modern history of American Finance, from the 1920’s to the present time, is a testament to the nation’s current condition as the world’s largest economy. A strong political system and legal structure, extensive natural resources, highly productive farms, and continuous advancing technology are some of the key factors that have contributed in achieving the country’s financial status.
As the world’s largest economy, the U.S. attracts immigrants from all over the world due to its high-income wages and entrepreneurial opportunities. The U.S. job market excels in industrial and technological sectors, which provide the highest growth. However, not everything has been good times for the economy. Americans have been faced with constant financial challenges throughout the past century, and some of these periods have required a great amount of effort to overcome. We offer you a timeline of American economy, a picture of past and present that could help paint a picture of what lies ahead.
Americans had a prosperity period for most of this decade. The U.S. federal debt was lowered by 33%. Industries in auto, glass, oil, tourism, construction, electricity, and telephone experienced fast growth. Decade ends with the stock market crash in October 28, 1929, which started the Great Depression.
The economy plunged into the Great Depression with unemployment rates as high as 25% by 1932. Financial institutions reported substantial losses caused by a banking crisis and high savings withdrawals from banks by customers. Approximately 40% of banks went bankrupt during this period.
The Emergency Banking Act and the Federal Deposit Insurance Corporations were created to control the Banking crisis.
This decade can be divided into two periods, which are wartime controls from 1941 to 1945 and post-war prosperity from 1945 to 1973.
- Wartime controls period. War production dominated national manufacturing to meet all military priorities. Approximately six million women began to work in production and manufacturing sectors.
- Post-war prosperity period. It is known as the golden age of U.S. capitalism that lasted up to the early 1970’s based on a higher educated work force and the maturity of war bonds for $200 billion. This decade is also called the “Baby Boom” era due to the dramatic fertility rise from 1942-1957. Baby boomers were the result of delayed childbearing and marriage age, additional income, and an overall optimistic view of the future.
There were short recessions, in the years of 1945 and 1949, due to the post-war environment. During WWII, federal taxes for profits, payrolls, and incomes were as high as 90%.
Prosperity period continues from previous decade. New technologies were introduced such as the Aerospace industry, which started the “Space Race” against the Soviet Union.
Economy growth continues from previous decade. The U.S. competes with the Soviet Union as the main economy and military power in the world.
The post-war prosperity period ends in the early 1970’s due to various reasons, such as the 1973 oil crisis, higher imports for manufactured goods, deregulation of the economy, and the 1973-1974 stock market crash. In 1972, the U.S. government stopped using the “gold standard” to back funds.
The first years of the 1980s reported business bankruptcies as high as 50%. The Dow Jones index crashed on October 19, 1987 with loses of $500 billion in one day. The 1980s’ economy was based on financial policies for fiscal expansion called Reaganomics. Because of Reaganomics, the U.S. national debt triples from 1981 to 1988 for $930 billion to $2.6 trillion, respectively. Large trade deficits were first reported during this decade by the United States.
The 1990s benefited from a technological revolution with investments pouring into information technology companies widely known as the Dotcom bubble. This Dotcom bubble caused the stock market to grow by 300%. In addition, the U.S experienced an increased in globalization, high corporate taxes, and free trade.
After the Dotcom bubble burst in the year 2000, stocks market lost up to 75% of growth achieved in the 1990s.
Furthermore, this decade experienced a real estate market boom from 2001 to 2007. Real estate market collapses in 2008 and launches the “Great Recession”. House prices lost approximately 20% of their value nationwide.
The U.S. is currently experiencing a social Network boom with companies like LinkedIn, Facebook, and Twitter, to name a few.
The modern American financial history has experienced periods of hardship and prosperity. After the Second World War, the U.S. established itself as the world’s leading economy with heavy investments in the technology, global manufacturing, and military sectors. Whether the United States will continue to be the world’s leading nation in the future is a topic of heated debate.