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How Did The Cold War Affect The Economy

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How the fear of the Cold War led to poor economic decisions by the US GOV

During the Cold War, the United States and the Soviet Union fought in a global struggle for political and economic victory. This conflict had a major impact on American society and politics, with many Americans believing that the Soviet Union's ultimate goal was to replace democracy with communism. This slowly led up to many problems and issues in the United States. Cold War fears had a significant impact on US economic policies as the US needing to compete with the Soviet Union led to a waste of resources away from other areas of the economy, and that led to a negative impact on economic growth implying that The United States' entry into the Cold War greatly impacted …show more content…

During this time, there was a lot of worry and suspicion about communism, which led the government to make decisions that harmed individual freedoms and slowed economic progress. The focus on countering communism and protecting national security meant that the government started to closely watch and control its citizens. This made people afraid to take risks and slowed their creativity and ability to come up with new ideas. Businesses were also hesitant to innovate for fear of being accused of having communist sympathies. As a result, the economy missed out on opportunities for growth and technological advancement. The government also imposed policies that restricted international trade and made it harder for businesses to engage with other countries. These measures limited the benefits of global trade and made the economy less efficient., "McCarthyism and the Second Red Scare," by Landon R. Y, claims that the fear of the cold war and communism slowed economic growth by changing the country's major perspective and disregarding focus going around the outside …show more content…

This occurred in 1930 with the Smoot-Hawley Tariff Act. The goal was to protect American businesses by increasing the cost of purchasing goods from other countries. The government believed that doing so would keep the United States safe from communism. However, it backfired and harmed the economy. High tariffs made it more difficult for companies to trade with other countries and limited American access to international markets.
This resulted in a declining economy as well as connections with other countries. “The Senate Passes the Smoot-Hawley Tariff,” 2014, suggests how this policy turned out to be a complete disaster and how it stopped international trade with other

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