Originally Posted by GermanStar
Also to the extent that the GDP in the 40's was an instrument of our total commitment to war. There is no comparison, and no opportunity to echo the outcome of the 50's in the same manner.
Except that manufacturing in the US during the 50's is textbook BOOM economy. Everything from home ownership to rate of college entrance to standard of living. The very companies that defined manufacturing in America made their greatest strides in the 50's: GE, IBM, GM, Ford, Alcoa, even McDonalds, Coca-Cola, US Steel. The entire Suburban culture grew from that one decade.
That decade was not just a product of the GNP of WW2, although that surely helped. The conversion of Bond debt from 46-49 [grown to pay for the war] also helped fuel the growth of the 50's. As the US converted to a peacetime economy it had choices and we were lucky that people made choices of growth and investment.
We also raised taxes during that time [the 50's] to pay off the debt and pay for the growing infrastructure [Interstates, bridges, hospitals, schools]. People understood that need and accepted it.
The comparison to now is that folks don't have manufacturing to rely on, nor do we have a "growth economy". GDP went up 2.6% this year. What was inflation? While GDP takes into acount the Trade Deficit, it does not take into account the Budget Deficit, Inflation, Local, State or Institutional Taxes or our underground economy [11 million strong].
That is why I compare the two and say that we lack the elements now to have the same growth patterns that we had in the 50's and will watch countries who are "making things" grow into the economic powers in the next 25 years, just when we need the tax base to support the boomers retirement problems.