How does war help a nation's economy?

by CheetosJoe

Specifically, you ask how the USA got out of the Great Depression, everyone says they got involved in WW2. Wouldn't that just make things worse, as the US Government would have to divert more resources to the war?

TrustMeIAMAProfessor

Even before entering World War II, the US federal government was investing a significant amount of money into the country through New Deal programs. Around 1936-1937, FDR became convinced that the economy was recovering naturally on its own and he chose to reduce spending. This resulted in a recession sometimes called the recession of 1937, or by conservatives "The Roosevelt Recession." In other words, while we may have been crawling out of the Depression naturally, a major, sustained economic boost was poised to solve the problem.

Flash forward to early 1941 and the US signs the Lend Lease Agreement with our allies. This provided an economic boost by encouraging auto makers to build Jeeps, ship builders to start constructing new transit ships, and weapons manufacturers to build new guns. In order to do all of this, you need to hire new workers and (often) build new factories.

These new jobs in places like California, Washington, and Texas paid significantly better than what people were earning in places like Louisiana or Oklahoma, so a lot of people picked up and moved. You might make $1.25 an hour and be paid for your training to learn how to weld or become a riveter (hence Rosie the Riveter) - whereas in Louisiana you were lucky to make $0.25 an hour.

Again flash forward to Pearl Harbor Day, the government and businesses further ramp up their production, and hire loads of new workers.

Workers not only benefit from training and health care in these new jobs, they are allowed to join unions in many cases (though these unions are still segregated). FDR signs executive orders discouraging discrimination in war related manufacturing and allowing unions. This helps to boost moral, allows more African Americans to join the workforce (though discrimination in reality is still rampant), and generally puts workers "on board" with the patriotic feeling that working hard during the war is good for everyone.

While the most popular answer will point out the huge amounts of material build for the US armed forces during World War II and its boost to the economy, less often remembered is how much stuff we built for our allies.

The US sent more than 22,000 armored vehicles to Russia during WWII. Something like 6,000 tanks. 77,000 Jeeps. 100,000+ machine guns. That's a ton of production and, in turn, a huge number of jobs for people in the US that needed them at the tail end of the Depression.