Conformity and Challenges in the Eisenhower and Kennedy Years 365of the government’s spending went to the military [about 10 percent of the
GNP], which reinforced the importance of “Military Keynesianism” or the
Military-Industrial Complex, and explained why U.S. foreign policy was so
militaristic in that era–it was good for business! It was clear, especially after
the terrible impact of the depression of the 1920s and 1930s, that the govern-
ment would have to play a much larger role in the economy than before. It
was ironic then, and still is now, that conservatives criticized this government
involvement so harshly since it was banks, industries, and other elements of
the ruling elite that benefitted from it. Without the government spending vast
sums of money, economic reconstruction would have been virtually impossi-
ble, corporations would not have recovered from the depression, and typical
Americans would not have had enough money to purchase the goods that
American workers in American firms were producing. Government interven-
tion in the economy was thus far from Socialist; it was the key to rebuilding
Capitalism after the depression and war, a goal every conservative could sup-
port.
One of the more significant actions toward this end was the passage of the
G.I. Bill of Rights for World War II veterans. Prior to the war, most Americans,
especially the working poor and farmers, could not afford a college education.
The G.I. Bill, however, provided a year of unemployment compensation and
also tuition benefits for a college or vocational education, while making loans
available for vets to buy houses or start small businesses. As noted, fearing a
return to depression, the government, using public money, acted quickly to
make economic opportunities available to vets, while helping out key indus-
tries such as housing with its loan programs [another example, to be redun-
dant, of Military Keynesianism]. Nearly half, about 7.8 million, of the 16
million World War II vets benefitted in some way from the G.I. Bill, which
backed loans for about 2.5 million homes and enabled millions of Americans
to enter the middle and professional classes, a key element in expanding the
American economy and consumer base. Government efforts such as creating
jobs via military spending, the G.I. Bill, the establishment of a coast-to-coast
highway system, and housing loans led to increased consumption as well.
To begin, the American population was growing rapidly. While the census
count for 1940 was 132 million, by 1950 it was up to 152 million, and five
years later, had risen to 165 million. By 1960, generally considered the last of
the “Baby Boom” years, a period of significantly increased birth rates after