Few periods in America have influenced the current government structure, size, and economy rather than the “Roaring Twenties” and the “Great Depression”. At the beginning of the 1920s, the United States was converting from wartime to peace time economy at the time weapons for World War I were no longer useful. In this decade, America became the richest nation in the world and a culture of consumerism was born. People spent money for better roads, tourism, and holiday resorts.
Real estates booms sent land prices soaring (DeLong, 1997). Looking at technology, it played a vital role in delivering the economic and cultural good times that most of America enjoyed during the 1920s. The automobile’s popularity, construction of roads and highways, poured fresh public funds into the economy. This resulted to tremendous economic prosperity. Technology enhanced communication with the first public station being established, KDKA, the year 1922 introduced the first movie made with sound- The Jazz singer.
It is in this time that the United States became a modern middle-class economy of radios, consumer appliances, automobiles and suburbs. Mass production had made the United States the richest society the world had ever seen (DeLong, 1997). The economy today seems to negate the glory it received in the 1920s. According to Leonhardt (2010), it produced $ 15 trillion worth of goods and services in 2008 in estimates, making it the largest in the world.
The US economy however has shown a downward trend since in 2007, it began to slow significantly mainly because of a real-estate slump and other financial problems that has led the economy into a recession. The recession continued up to early 2009, making it the longest one in decades. August 2009 came with some hope with the Federal Reserve Bank’s policy-making committee saying that they believed the recession was ending. The bank cautioned that the recovery would be slow and there was a possibility that unemployment was to remain high for another year.
The year 2010 is seen as the year of severe economic contraction. According to Whitney (2010), reports in the financial media believe that the effects of ongoing credit contraction and the massive injection of the central bank liquidity have prevented the collapse of financial markets. A lot is still to be done in order to leverage households and stimulate the general economic activity. The financial crisis has stripped the economy $ 13 trillion in equity and Americans have grown gloomier about the economy and the nation’s direction over the past few months, although it shows signs of moving to recovery.
The country is persistent with high unemployment with ordinary working people continuing to fight to keep their jobs and maintain their standard of living. This is a contrast on what was happening in the 1920s. US had transformed in less than a decade to become the richest Nation in the world. High pay of $5 a day showed the low unemployment rate that existed. Industries were booming with high profits and numerous companies opened their doors to start operations.
The US might be the world’s leading economy, but the current unemployment rates, the number of businesses closing their doors as a result of inability to pay their debts and the constraints the government face in order to fully fund the budget requirements are overwhelming. The government, the Fed and the whole economy need to work towards alleviating bottlenecks that cause the economy harm. They need to uphold policies that will see to it that economy does not run to the stagflation condition of the 1970s.