As World War II drew to a close, many Americans worried about the domestic economy. Although the war had spurred employment and production and had pulled the nation out of the Great Depression, the war economy couldn’t last forever. Moreover, millions of veterans would soon return home in search of jobs that might not be there anymore. As inflation soared, many feared that the immediate postwar recession of 1946 and 1947 heralded the return of the Great Depression.
Truman and Congress took steps to address the economic downturn. In 1946, for instance, Congress passed the Employment Act, which created the Council of Economic Advisors to help Truman maximize national employment.
During the recession, literally millions of industrial laborers went on strike to protest inadequate wages. Truman continued to support the labor unions as he had during the war, but conservatives feared that halting industrial production would severely cripple the economy. To remedy this problem, Republicans in Congress passed the Taft-Hartley Act in 1947, over Truman’s veto, to restrict the influence of unions. The act outlawed all-union workplaces, made unions liable for damages incurred during interunion disputes, and required labor organizers to denounce Communism and take oaths of loyalty.
Perhaps the most important measure taken in combating the recession was the Montgomery G.I. Bill, which Congress had passed in 1944 to help the 15 million returning U.S. veterans reenter the job market. Also known as the Servicemen’s Readjustment Act and the G.I. Bill of Rights, the G.I. Bill gave government grants to any veteran who wished to return to school. Neither Truman nor Congress predicted that more than half of returning veterans would take advantage of approximately $15 billion in federal grants to attend vocational schools, colleges, and universities. The G.I. Bill also set aside an equal amount of money to provide veterans with loans for new homes, farms, and businesses.
Historians have since hailed the Montgomery G.I. Bill as the most significant law passed to address the concerns of the postwar years. It reduced fierce competition for jobs after the war and boosted the economy by helping millions of workers acquire new skills. Many have claimed that the economic boom in the 1950s would never have happened at all without the G.I. Bill.
Indeed, the U.S. economy recovered quickly from the brief recession of 1946–1947 and then veritably exploded, making Americans the wealthiest people in the world. For approximately twenty years, the U.S. economic surge seemed unstoppable. Within just a few years, almost two-thirds of American families achieved middle-class status. Gross national product (GNP) more than doubled during the 1950s and then doubled again in the 1960s. By 1960, most American families had a car, a TV, and a refrigerator and owned their own home—an amazing achievement given that fewer than half of Americans had any of these luxuries just thirty years earlier.