Summary
Highlights
The economic boom in the 1950s was primarily due to a burgeoning private sector and significant government spending. After WWII, Americans had saved a record amount of money due to wartime rationing and limited consumer goods production. This pent-up demand led to a massive increase in consumer spending on items like automobiles and new technologies. The widespread adoption of credit cards further fueled this spending.
Federal government spending, driven by the Cold War, also played a crucial role. The GI Bill provided financial assistance to veterans for college and home loans, boosting the housing industry. The Federal Aid Highway Act of 1956 funded the construction of interstate highways, a military necessity that stimulated industries like steel, oil, and construction, while also connecting urban centers to suburbs and facilitating manufacturing growth in new areas like the South. Defense contracts also spurred the growth of the high-tech industry, such as Silicon Valley, which initially focused on military computer systems.
One significant effect of the prosperity was the baby boom, a rapid increase in population from the mid-1940s to the mid-1960s. Economic stability and rising wages allowed families to support more children, and advancements in vaccinations for diseases like diphtheria and polio contributed to higher child survival rates.
Suburbanization, the mass migration of middle-class families to the suburbs, was another major effect. William Levitt's application of assembly-line principles to home construction, exemplified by Levittown, made single-family homes affordable. While this fueled economic activity through spending on home furnishings and appliances, it was largely a white, middle-class phenomenon, with practices like redlining and discriminatory housing covenants leading to housing segregation and urban decay for minority communities.
The third major effect was the Sun Belt migration, a massive movement of Americans to states like California, Florida, and Texas. This was driven by warmer climates (made more comfortable by air conditioning), increased mobility due to the interstate highway system, and the concentration of federal defense industry spending in these regions, creating millions of jobs. This migration redistributed political and economic power away from the Northeast and Midwest towards the Sun Belt, influencing congressional representation and strengthening certain political coalitions, such as the Dixiecrats, who supported racial segregation.