To the Editor
World War II ended abruptly on August 15, 1945. Across America whistles blew, horns tooted, and people poured into the streets to celebrate the end of our four-year nightmare. What a wonderfully joyous relief!
It also was the end of millions of stateside jobs, just when we had eleven million returning troops who would need jobs, and our national debt equaled 156% of GNP (vs 99% today). (Editors note: A balanced budget amendment would have meant we could not have participated in WW II), What to do?
If today’s Tea Party had been in power, the answer would have been cut spending and let the markets rule. If we sink back into depression… well, austerity builds character.
Instead, President Truman signed two bills. The GI Bill enabled returning troops to attend college and provided low-interest loans to buy homes. The Marshall Plan rebuilt Europe and Japan, providing us with future trading partners. Industry converted back to peacetime production, and married women were encouraged to stay home and produce baby boomers instead of munitions. It worked. Our 1946 unemployment rate was only 3.9%.
These investments provided not only jobs, but also new knowledge, businesses, and markets. Our debt gradually dropped to 91% of GNP in 1949, 70% in 1953, and a low of 32% in 1981 — just as Ronald Reagan assumed the presidency. (Editors note: At the end of the Reagan presidency the debt was 53%)
Our situations then and now are different, and we need different solutions. In 1945 we had a large manufacturing base and huge pent-up demand. Today’s manufacturing capacity is older and smaller, our markets are global, our current pent-up demand can’t be met without jobs, and today’s jobs require more education, which is expensive.
Nonetheless, we can learn from our post-war presidents, both Democratic and Republican, who believed in the promise of America and acted accordingly. We need that kind of foresight today.