Great War The United States after the Great War

World War I, also known as the Great War, officially came to an end in 1918 and reshaped the country in a variety of ways. One of the most immediate changes was the way the world perceived the United States. Before the war, most of the country and its leaders preferred an isolationist stance to any international conflict. In 1914 the U.S. had only a small army and a pitiful navy, yet as the war progressed many Americans began to disapprove of the German's use of submarines to sink neutral ships such as the infamous sinking of the Lusitania (Hickman). However, it is interesting to note that the German's were actually correct in their assertion that the Lusitania was being used to carry military ammunition, as divers have recently uncovered from the wreckage, which did actually make the ship a legitimate military target (Greenhill).

Despite the humble military capabilities before the war, the Americans were able to transform their identity and military capabilities in a short period of time. The country already had the human capital and the natural resources needed to become a military power however until it never utilized these resources until the neutrality was broken. However, after the war ended both Americans and the rest of the world understood the country's military capabilities and the country was perceived as one of the world's great superpowers. The United States, under President Wilson's leadership, sent over two million men to Europe and began what later came to be known as the "American Century" as the U.S. established itself as one of the world's greatest military powers. This also had implications for the balance of power and how nations treated the demands of the U.S.

While the war fostered a great deal of economic activity due to the fact that companies had been busy making war supplies, all of this economic activity came to a rather abrupt stop when the war was won. As a result the...

entered into a recession between 1918 and 1919 and then followed by the Great Depression a few years later. Such post-war economic slumps are generally common however represented the only war that America fought in the twentieth century in which they actually had to experience such a slump (Kaldor). The total war was estimated to cost about thirty two billion dollars which represented roughly half of the total gross national product (GNP) in 1918 (Rockoff).
This had three long-term consequences for the economic environment after the war. The federal government finances and the tax rate were permanently altered by the war. Tax rates had to remain higher after the war than before the war to pay for items such as the interest on the national debt and for other items such as veterans' benefits. Furthermore, before the war the United States was a net debtor however after the war foreign investments exceeded the amount owed to foreign entities by billions and the United States was now a net creditor to the rest of the world. Most of this investment was comprised of private domestic lenders and New York City became the financial powerhouse of the world.

Another interesting result of the financial implication that the war had on the country was the debate which centered on what role the U.S. government should play in regards to the economy. It was clear that the many…