I am more thinking the drop in government spending from $84 billion in 1945 (big debt) to under $30 billion in 1946 (surplus) and the tax cuts from 1948. Rebuilding someone else is generally not seen as a plus to the overall economy.
>Rebuilding someone else is generally not seen as a plus to the overall economy.
Maybe at full employment it's not. In a country winding down production from WWII, rebuilding someone else is the best thing that could possibly happen to the economy.
Government production would down (thus the budget), but domestic production for domestic items kicked in pretty hard. You might want to check the labor statistics of the day.
WWII production did wind down, however, and had to be replaced. This was aided by paying US companies to rebuild Europe and Japan.
If Britain or France has come out of the war unscathed and been able to rebuild the rest of Europe, the postwar history of the United States would have been significantly different.
"This was aided by paying US companies to rebuild Europe and Japan."
How much money was spent on manufacturing here for both versus total GDP?
"If Britain or France has come out of the war unscathed and been able to rebuild the rest of Europe, the postwar history of the United States would have been significantly different."
The US would have still been fine and given the same policies minus the Marshall Plan, we would have had less government spending. Also, if the UK and France came out unscathed then the US would probably have not needed to enter the war in Europe.
