1) After-effects of WW II. Our commercial competition in Europe and Asia had seen their economies devastated, their productive capacity destroyed... leaving America propelled to the top of the heap proportionately.
That, and also the fact that the other countries bought from the US as they developed/recovered themselves, and where we ourselves where moving away from a depressed economic state so we had room for growth.
2) Population boom. (Plenty of trained workers.) Education boom (GI Bill.) Cheap energy with US at peak rates of oil production, (very low-priced).
That's a bunch of reasons together. I agree the population increase (and the favorable demographics, more young people for each old person) played an important role. The GI bill played some role, although not a dominant one. Cheaper energy helped, but it wasn't quite so cheap in real terms as many seem to think.
inflationdata.com
The real cheap energy period (at least in terms of gasoline) is in the 90s. Take out the increase in gasoline tax (which is more a tax issue than a cheap or expensive energy issue), or even to an extent if you don't do that, and today's prices are comparable or even lower than, those in the 50s and 60s (and if you think inflation has been higher, than official CPI stats would indicate, and I think you do, even though I do not, than this would be true to an even larger extent, we would still be in the cheap energy period in real gasoline prices terms)
Interstate highway system, transcontinental transportation links knitting a more efficient continental-level economy together.
That certainly helped in at least gross terms, and perhaps in net terms as well.
4) Reduction in military spending.
Military spending had been greatly reduced but it was a much larger portion of our economy than it is now.
5) Technological innovation.
And important factor in economic growth, but not a factor that's gone away.
Re: "...in the 50s and 60s. It took place in an environment with much less regulation, with lower effective total tax rates for much of the middle class" & "...The higher tax rates didn't help the growth of the middle class...."
Sounds like you are talking out of both sides of your mouth there. <g> (Which was it? 'High' or 'Low?)
Both.
Don't just look at what you bolded, look at the whole quote.
Notice the difference between "tax rates", and "effective tax rates". Notice the difference between "rates", and "rates for much of the middle class".
Effective tax rates on much of the middle class where lower, while the headline/nominal/official rates for the rich, and even for some of the middle class (at least measured by today's definition of wealth, which is not the same as that from the 50s and 60s, an upper middle class person today would be considered rich by the standards back then) |
