Title: Impact of the Korean War on the economy of the United States - Wikipedia
Headings: Impact of the Korean War on the economy of the United States
Impact of the Korean War on the economy of the United States
Contents
Financing
Monetary policy
Price freeze
Military spending
Notes
References

Content: Impact of the Korean War on the economy of the United States - Wikipedia
Impact of the Korean War on the economy of the United States
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The impact of the Korean War on the Economy of the United States refers to the ways in which the American economy was affected by the Korean experience from 1950 to 1953. The Korean War boosted GDP growth through government spending, which in turn constrained investment and consumption. While taxes were raised significantly to finance the war, the Federal Reserve followed an anti-inflationary policy. Though there was a large increase in prices at the outset of the war, price and wage controls ultimately stabilized prices by the end of the war. Consumption and investment continued to grow after the war, but below the trend rate prior to the war. Contents
1 Financing
2 Monetary policy
3 Price freeze
4 Military spending
5 Notes
6 References
Financing
While the United States historically financed wars using a combination of direct contemporaneous taxes, debt, and money creation, with taxation comprising a relatively small fraction of expenses, the Korean War was financed mainly via taxation. This focus on taxation was significant change in economic policy, as President Harry S. Truman focused on maintaining a balanced budget. He favored pay-as-you-go taxation and Congress supported this; in 1950, the House of Representatives, in an overwhelming majority, voted 328 to 7 to raise personal income taxes, corporate income taxes, and excise taxes. Also, capital taxation reached their highest levels in the history of the U.S. during the Korean War, rising to an average of about 62%.