The End of Affluence Increasingly, even economists and bankers are coming to understand that we are in the midst of a global economic shift. The core of this change is the inevitable decline in American consumption, which for a generation has been fueled by borrowing and debt. The bill now has to be paid, so the trend of steadily growing U.
While noting the unparalleled riches of American economic growth, it criticized the underlying structures of an economy dedicated only to increasing production and the consumption of goods. Galbraith argued that the U. In the two decades after the end of World War II, the American economy witnessed massive and sustained growth that reshaped American culture through the abundance of consumer goods.
Standards of living—across all income levels—climbed to unparalleled heights and economic inequality plummeted. The new consumer economy that lifted millions of Americans into its burgeoning middle class also reproduced existing inequalities. Women struggled to claim equal rights as full participants in American society.
The poor struggled to win access to good schools, good healthcare, and good jobs. The same suburbs that gave middle-class Americans new space left cities withering in spirals of poverty and crime. The Jim Crow South tenaciously defended segregation, and black Americans and other minorities suffered discrimination all across the country.
The contradictions of the Affluent Society defined the decade: Levittown in the earlys. The seeds of a suburban nation were planted in New Deal government programs.
At the height of the Great Depression, insomehouseholds lost their property to foreclosure. A year later, half of all U. The foreclosure rate stood at more than one thousand per day. The HOLC introduced the amortized mortgage, allowing borrowers to pay back interest and principal regularly over fifteen years instead of the then standard five-year mortgage that carried large balloon payments at the end of the contract.
Though homeowners paid more for their homes under this new system, home ownership was opened to the multitudes who could now gain residential stability, lower monthly mortgage payments, and accrue wealth as property values rose over time.
Lenders, however, had to agree to offer low rates and terms of up to twenty or thirty years. Even more consumers could afford homes. Though only slightly more than a third of homes had an FHA-backed mortgage byFHA loans had a ripple effect, with private lenders granting more and more home loans even to non-FHA-backed borrowers.
Government spending during World War II pushed the United States out of the Depression and into an economic boom that would be sustained after the war by continued government spending. Government expenditures provided loans to veterans, subsidized corporate research and development, and built the interstate highway system.
In the decades after World War II, business boomed, unionization peaked, wages rose, and sustained growth buoyed a new consumer economy. Billpassed inoffered low-interest home loans, a stipend to attend college, loans to start a business, and unemployment benefits.
The rapid growth of home ownership and the rise of suburban communities helped drive the postwar economic boom. Builders created sprawling neighborhoods of single-family homes on the outskirts of American cities. Purchasing large acreage, subdividing lots, and contracting crews to build countless homes at economies of scale, Levitt offered affordable suburban housing to veterans and their families.
Levitt became the prophet of the new suburbs, and his model of large-scale suburban development was duplicated by developers across the country.
Home ownership rates rose from 44 percent in to almost 62 percent in Between andsuburban communities with more than ten thousand people grew Eighty-three percent of all population growth occurred in suburban places.
As manufacturers converted from war materials back to consumer goods, and as the suburbs developed, appliance and automobile sales rose dramatically.
Flush with rising wages and wartime savings, homeowners also used newly created installment plans to buy new consumer goods at once instead of saving for years to make major purchases.
Credit cards, first issued infurther increased access to credit. No longer stymied by the Depression or wartime restrictions, consumers bought countless washers, dryers, refrigerators, freezers, and, suddenly, televisions.
The percentage of Americans that owned at least one television increased from 12 percent in to more than 87 percent in This new suburban economy also led to increased demand for automobiles. The percentage of American families owning cars increased from 54 percent in to 74 percent in Motor fuel consumption rose from some twenty-two million gallons in to around fifty-nine million gallons in For advantaged buyers, loans had never been easier to obtain, consumer goods had never been more accessible, and well-paying jobs had never been more abundant.
Beneath aggregate numbers, racial disparity, sexual discrimination, and economic inequality persevered, undermining many of the assumptions of an Affluent Society.
In real estate appraisers arrived in sunny Pasadena, California. Just when many middle- and working-class white American families began their journey of upward mobility by moving to the suburbs with the help of government programs such as the FHA and the G.
Bill, many African Americans and other racial minorities found themselves systematically shut out. A look at the relationship between federal organizations such as the HOLC, the FHA, and private banks, lenders, and real estate agents tells the story of standardized policies that produced a segregated housing market.The United States responded with an economic boycott of Cuba, and a large-scale economic support program for Latin America under Kennedy, the Alliance for Progress.
East Germany was the weak point in the Soviet empire, with refugees leaving for the West by the thousands every week.
At the end of the s the Cold War ended, helping the United States out of recession. The Middle East became more important in American foreign policy, especially after the September 11 attacks in At a time when economic and political inequality in the United States only continues to rise, Affluence and Influence raises important questions about whether American democracy is truly responding to the needs of all its citizens.
In , Michael Harrington published The Other America, a shocking expose of poverty and want in the United States. Thoroughly researched, the book chronicled the plight of "the unskilled workers, the migrant farm workers, the aged, the minorities, and all of the others who live in the economic.
The economy of the United States is a highly developed mixed economy. It is the world's largest economy by nominal GDP and the second-largest by purchasing power parity (PPP).
It also has the world's seventh-highest per capita GDP (nominal) and the eleventh-highest per capita GDP (PPP) in The third economic downturn was the depression of the late s to , following the Panic of , when the money supply in the United States contracted by about 34 percent with prices falling by 33 percent.