- Historic Sites
“An Adventure In Prosperity”
We gave the baby boomers plenty of room to play in
October 2005 | Volume 56, Issue 5
This certainly helped keep unemployment down, but far more important was strong civilian demand for goods and services. Many industrial products—automobiles, appliances, tires, even nylon stockings—had been nearly unobtainable during the war, while workers had banked over $137 billion in savings in those years. The demand for renewed industrial production, fueled by those billions in savings, kept the American economy humming.
And veterans poured into the country’s colleges and technical schools, thanks to the GI Bill. In 1947, the peak year, 49 percent of college enrollees were veterans. And while American campuses hardly turned into the “hobo jungles” feared by President Hutchins, temporary buildings (many of them war-surplus Quonset huts) sprouted like mushrooms to house the influx of students. Altogether some 7.8 million veterans took advantage of the GI Bill to further their education.
By the end of the program in 1956 this had cost $14.5 billion, far above the original estimates. But it turned out to be one of the best investments the United States government has ever made. First, it greatly increased what economists call “human capital,” by giving millions the education they needed to handle better-paying and more productive jobs than they would have had otherwise. This helped mightily to power the American economy as the information age began to supersede the industrial age in the next few decades.
Further, because American children on average have traditionally obtained two more years of education than their parents, the educational benefits of the GI Bill have redounded through the generations since.
Equally important to the future of the country were the loan guarantees to help veterans buy houses, farms, or businesses. The original guarantee of half the loan up to $2,000 was soon made more generous, with guarantees up to $25,000 or 60 percent of the loan, whichever was less. With banks fully protected against default, many were willing to write mortgages with no money down.
All that was needed was the housing for veterans to live in, and real estate developers such as William Levitt began to supply it on an industrial scale. Levitt built 17,500 two-bedroom houses on lots that measured 60 by 100 feet in Long Island’s Levittown, and he was copied by many others in cities around the country. The American suburbs, the linch-pin of American politics for the last half-century, were to a significant extent the product of the GI Bill.
Of course, this new world had its detractors. One, in a bestselling 1956 book called
As with the educational provisions of the GI Bill, the loan guarantees had positive effects for decades after they began. As the families paid off their mortgages, built additions, and enjoyed rising real estate values, they acquired something that most Americans had not known before: capital, financial assets that they could use to get their children off to a good start or to provide for a comfortable retirement.
Just as the GI Bill was about to be signed, the Wall Street investor Bernard Baruch told Congress that regardless of the gloom of the economists regarding the future, with proper planning postwar America could be what he called “an adventure in prosperity.” Not even Baruch knew just how true his words would prove to be, thanks in no small measure to the GI Bill.