How did the Vietnam war affect the US economy?

Answer

The answer is that war is always an economic stimulus to the victor, but of course this is not always so.

Great Britain was destroyed by WW2; only slightly less than was Germany.

However, in this case, the Vietnam War was "good for business" for the US.

There was no destruction on American soil, and business was booming for the Military-Industrial complex.

"Beware the Military-Industrial Complex!" warned Eisenhower, on leaving the office of the US Presidency. He saw the beginning of the arms buildup of the "Cold War", and feared that the Pentagon, in league with its miltary industry, would warp American policy for generations to come.

And of course, it has.

However, it was not a closed system. There were other forces at play. In this case, the Oil States of the Middle East.

In 1967, Eqypt and Syria attacked Israel, and were beaten back. In 1973, fearing an attack was imminent, Israel preemptively attacked a number of Gulf States.

At the time, Israel was getting its arms from the US, while the Arab states were being supplied by the USSR. The US supported their Cold War proxy, Israel, and in retaliation, the Arab states cut off all oil to the West.

This made short work of the effort in Southeast Asia. The US military fell apart.

While the Arab states, who were no fans of Communism, eventually relented, the damage was done; the price of oil was now far too high to continue the war effort.

Probably the most important thing to take away from this is that before the Oil Embargo, there was no expectation that the war would end anytime soon; The Pentagon was happy with the war and so was the Dow Jones Industrial; who cared if dirty unwashed hippies and the Democratic Party were against it?

This was the first time that the US learned a painful lesson that we still are struggling with: Economy in the twenty-first century equals Oil.

First answer by Genious. Last edit by ID1193216796. Question popularity: 186 [recommend question]