1950 - 1975
During the 70s, the Vietnam War had just concluded and the U.S. economy was hurting. The golden age is over and the U.S. entered a recession. Many problems were starting to pop up and it was overwhelming the American people. The new problems were the energy shortage, high inflation, and high unemployment.
The energy shortage occurred because of a worldwide oil shortage. Nations around the world started to conserve their non-renewable oil supplies in hopes to have some still available in the near future. Nations started to depend on the Middle East for oil because of their sheer abundance of it. During this oil shortage, the Arab and Israel states had a war called the Yom Kippur War. The Arabs would lose because the west had helped out the Israelis. Due to this, out of frustration, the Arabs put and oil embargo on the west called the "Arab Oil Embargo." Of the participants were the world were the largest oil producers such as Saudi Arabia, Iraq, and Kuwait. The gas prices would sky rocket, quadruple even. This devastated the western economy including the Americans economy. This would lead to the Americas having stagflation. Stagflation is a portmanteau word used to describe a period with a high rate of inflation combined with an economic recession. This would bring the U.S. gas prices to go from 35 cents a gallon in the beginning of 1970 to around 90 cents near the end of the 70s. The embargo would end less than a year later in March of 1974 but the effects would stay till the end of the century.
The inflation of the 1970s was terrible. There was a mix of a high demand and a low supply of things such as jobs, houses, cars etc. The reason for this high inflation was because no one wanted to take office as the Federal Reserve chairman. Also many people under estimated the effects of the inflation problems. No one really had a mandate to stop the inflation either. So what happened was that the prices kept on rising and rising. Another thing that caused inflation was that the investors and creditors had no confidence in the bank system. The lack of credibility and commitment cause inflation to rise. The three main reasons toward inflation are as follows.
Another reason for the poor economy was the high unemployment. The high unemployment was a result of the women work force and a combination of returning soldiers from Vietnam. In 1869 the employment was around 80 million workers. By the end of the 70s, it was more than 96 million workers. This was an increase of over 16 million more workers. It went from 3.3 percent unemployment to around 8 percent unemployment, nearly reaching another depression.
The economy of the seventies was terrible. Dubbed with an oil embargo and a mix of other problems led the American nation to an almost depression state. The energy shortage was the start followed by high unemployment and inflation. The economy of the US during the seventies was a hard time for everybody in America. It wasn't good and it just got worse and worse until the 80s.
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