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How important were the US government’s economic policies in the US economic boom of the 1920s? [40m]
The US government’s economic policies played vital roles in the 1920s economic boom. They enabled less money taken by taxation and more to be spent on goods, new American mindsets encouraging spending and powerful industries without competition from overseas.
Laissez-faire was a policy affecting the American mindset - it discouraged the government from getting involved in civilian life, leaving people to make their own decisions on what they would spend money on. Protective tariffs were another policy with great importance to the boom - they made it expensive to import foreign goods. Americans benefitted from this due to businesses being shielded from competition overseas, enabling rapid growth which came with massive profits. Another policy keeping taxation low brought special benefits to the rich in particular. The rich could invest their money into industries and buy expensive goods, taxed less so they can spend more. Lastly but no less important to the boom, powerful trusts. Trusts were enormous corporations. Men could have control over a particular industry like oil, gas, which would make them extremely rich. These policies altogether encouraged mass spending and made it easier to have more money to play with; thriftiness was a thing in the past.
However, policies cannot take all credit for the US economic boom of the 1920s. Mass production played a huge part; the Henry Ford car production line, as an example. This meant tonnes of goods could be produced with a lower labour cost. Cities growing contributed too - roads were built, giving jobs, electricity industries had labourers and gave way for new appliances. Credit allowed people to buy without saving. Many radios were brought on credit. They could buy more quickly.
We cannot overlook the leisure industries too. By the end of the 1920s, a hundred billion cinema tickets were being sold weekly. The NBC network made $150m annually. With less working hours paired with higher wages, people could indulge in leisure, making it a ginormous industry that generated a fair deal of income, a result of and a contributing factor to the economic boom.
In conclusion, policies played an important part in the 1920s US economic boom. However, factors such as mass production, growing cities and new ways of purchase, alongside far more, were crucial to the boom. Altogether, policies contributed greatly but were not the only reason for the 1920s economic boom.