Wartime Economy
The basic concept of a wartime economy is the actions taken by the modern state to prepare its economy for war production. The government prepares and organizes troops for active service. A wartime economy also encourages people to act in a concerted way in order to bring about a particular objective. Lastly, it brings in resources to use to achieve that particular goal.
The major economic effect of WW1 was a massive increase in US industrial production coupled with stable prices. During the 1920’s, the USA experienced a boom such as never before, but was marred by weak government and incoherent policies. So, as an example, prohibition was meant to improve the quality of life but resulted in the growth of organized crime, strengthening of Federal control over the population through the FBI and other agencies, and the militarization of police forces.
National Bureau of Economic Research says "When the war began, the U.S. economy was in recession. But a 44-month economic boom ensued from 1914 to 1918, first as Europeans began purchasing U.S. goods for the war and later as the United States itself joined the battle. Rockoff writes “The long period of U.S. neutrality made the ultimate conversion of the economy to a wartime basis easier than it otherwise would have been, plant and equipment were added, and because they were added in response to demands from other countries already at war, they were added precisely in those sectors where they would be needed once the U.S. entered the war.”
WW2 began as America was going through the Great Depression, and it also brought us out of it. When the U.S. entered the war there was a need for war material such as guns, tanks, bullets, and steel to create them. This created jobs for many which created wealth for the people. Spending increased and the economy was beginning to prosper. The programs that FDR creates in the New Deal