When WWI, Pandemic and Slump Ended, Americans Sprung Into the Roaring Twenties

The unprecedented death and destruction of the First World War leveled the economies of the world, but the situation was different in the United States.

In fact, 1914 to 1918 were mainly years of prosperity for the United States, with the federal government injecting money into the war economy. Previously a debtor country, the United States emerged from the war as the chief lender and arguably the strongest and most dynamic economy in the world.

But even this boom in war does not fully explain what happened next. Somehow, despite a global flu pandemic that killed 675,000 Americans in 1918 and 1919, and a depression that ransacked the economy in 1920 and 1921, the United States not only recovered but have entered a decade of unprecedented growth and prosperity. The Americans have started a spending spree: the Roaring Twenties were launched.

WATCH: The Spanish flu was more deadly than the First World War

The “boom” before the bust

The Federal Reserve, established in 1913, weakened its monetary policy muscles for the first time during the First World War. Since the American public was unwilling to finance the war effort through taxes, the Fed did so by printing more money. In 1918, the result was runaway inflation. A pair of shoes that used to cost $ 3 before the war now costs $ 10 or $ 12.

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