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Over the past three decades, the U.S. economy has undergone a few transitions that have had both good and bad implications on the lives of U. S. citizens. To better understand these transitions, we need to go back and revisit the previous three decades, starting with the 1970’s. While I really don’t want to give a history lesson and you don’t want to read one, I think it’s important to point out some key points and noteworthy events in each of the past three decades. We can then focus on how people responded to those events during each specific decade. During the 1970’s, there were events that would hinder and somewhat damage the U.S. economy for most of the decade. These events would also provide a glimpse into how the economy was changing. Inflation was high during this decade, which in part, was caused by the Vietnam War and increased government spending. Unemployment was also on the rise during the 70’s. The American auto industry was having trouble in the domestic market because of the increase of foreign competition from Japan and German auto manufacturers, increased costs of production and changing consumer demands. The oil crisis’s during from 1973-1974 and again in 1979 forced consumers’ demand towards smaller, more energy efficient cars. The top three U.S. auto manufacturers were in so much financial trouble that they needed government funding to help support their operations. The auto industry wasn’t alone when it came to big business bailout. The steel industry also required government funding in order to stay afloat during the 1970’s. It was not uncommon for big business to turn to the government for financial aid during this decade. The increased role of the government did not have a positive effect on the floundering U.S. economy. President Nixon ended the Bretton Woods currency-exchange mechanism, ending the U.S. dollar to gold conversion. The result of this act only led to a higher increase of the inflation rate. High inflation and slow economic growth was often referred to as “stagflation”. Overall productivity was down, exports were low and imports flooded the market. Consumers with money were able to purchase market goods. Increased public spending on their behalf resulted in price increases. An increasing number of consumers were forced to borrow money from the banks, where the interest rates were skyrocketing based on the increased demand for loans. Unions became less effective and lost a lot of the advantage once held of the workers. Small business began to emerge and became more favorable than big businesses were to the U.S.
Approximate Word count = 1671
Approximate Pages = 6.7
(250 words per page double spaced)
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