The U.S. Economy: A Brief History

Colonization

• a way to expand economic gain during a time of reduced European resources

• Allowed colonial Americans more freedom to pursue economic goals (agriculture, fur and timber)

• Led to meritocracy in America

• Split with England over taxes

The New Nation's Economy

• Almost exclusively agrarian economy- Southern states depended on tobacco and cotton

- Northern states depended on timber, corn, molasses and whaling

• Early industrial economy evolved in the North- Cities grew larger especially seaports

• Automation of certain tasks- Cotton Gin

- Milling Saw

• Growth of slave trade in the south

Movement South and Westward

• Settlers expand Westward

• Gave free land to settlers- Allowed for expansion of American exports (food)

• Question of slavery• Brought the railroad west

Industrial Growth

• American Industrial Revolution in the late eighteenth century

• Invention of large-scale steel mills

• Immigrant migration

• Discovery(for uses) of oil

• Monopolies/Tycoon Era

• Commodities Trading

Inventions, Development and Corporations

• Shift from Tycoons to corporations at the beginning of the 20th century

• Inventions like combustion engine,distribution of electricity, assembly line and building techniques make US an international powerhouse

• Free from European wars of the 19th and 20th century

Government Involvement

Pre- Great Depression:• Involvement was small

almost non existent• Size of the federal

government was small• Beginnings of income and

property taxes• Little to no corporate

regulation• Isolationism/National

focus

Post- Great Depression:• Involvement had change

completely• Size of federal govt.

increased massively• Increase of all taxes and

services• Greater corporate

regulation• More internationally-

minded focus

The Postwar Economy: 1945-1960

• Had a large boom at the end of the 40’s and the beginning of the 50’s

• Became the dominant financial leader of the world: Bretton Woods

• Experienced periods of recession and stagnation in the late 50’s early 60’s

1970’s, 80’s and 90’s

Decade 70’s 80’s 90’sEconomic Growth

Negative Growth

Recession

Increased greatly until the end of the decade when demand collapsed

Weathered the recession of the 80’s and experienced tech boom, real estate bubble begins

Government involvement

Many regulation, taxes and price controls

Deregulation (Regan) lower taxes tax breaks, lowered social services increased military spending

Less corporate regulation,

More environmental regulation, Less military Spending, welfare reform

Problems - Inflation- Lack of resources (oil)- Overseas competition

- Collapse of supply

side economics

- End of the Cold War

- Trade imbalance

- Tech bubble burst- Corporate relocation- Real Estate bubble

Lasting Impact Off the gold standard, Fed res

Environmental protection

- The great recession - Globalization- Free Trade agreements