THE WAGES OF WAR.(effects of war on the US economy)

Publication: The New Yorker

Publication Date: 10-MAR-03

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COPYRIGHT 2003 All rights reserved. Reproduced by permission of The Condé Nast Publications Inc.

On April 18, 1942, sixteen American bombers under the command of Lieutenant Colonel Jimmy Doolittle took off from the aircraft carrier Hornet and flew six hundred miles to bomb Tokyo. The bombers did little damage, and all but one of them were forced to crash-land when they ran out of fuel. But, after four months of unrelentingly bad war news, Americans saw the mission as a psychological turning point. Days after the raid, the U.S. stock market, which had plummeted after the attack on Pearl Harbor, began to rally sharply. The U.S. economy, meanwhile, was booming, and grew more than fifteen per cent in both 1942 and 1943.

In 1950, the United States went to war in Korea. As military spending soared, the economy, which had been in recession in 1949, took off, too, growing 8.7 per cent in 1950...

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