Leon H. Keyserling and the Council of Economic Advisers

As World War II reached its closing months, many economists began to worry about the economic future of the United States. The war years from 1939 to 1945 had seen American prosperity grow as US factories produced the military goods to defeat the German and Japanese forces. However, prior to the war the world economy had suffered from a decade of depression in the 1930s following the stock market crash in 1929 and the banking crisis in 1933. These events followed the economic problems of the 1920s. Many economists believed that the post-World War II era would witness a return to depression. Their belief was based upon the fact that the period preceding the war had been a time of depression and that post-war periods usually saw recessions as military expenditures declined. They felt that what was true of previous post-war periods would be true of this one. However, these economists overlooked two factors. One was that the domestic war prosperity had built up consumer savings which were awaiting the purchase consumer goods after wartime rationing and after wartime production controls