The Cold War is the underlying conflict that characterized relations between the United States and the Soviet Union from the end of World War II (1939–45) until 1991, when the Soviet Union was dissolved. This period of mistrust and hostility grew from the ideological differences between Soviet Communism and U.S. capitalist democracy. The two countries never declared war on each other during this time, but each participated in wars in other parts of the world—most notably in Korea, Vietnam, and Grenada, Afghanistan, and Angola—to spread its own ideals and to check the influence of the other. The abiding tension of the Cold War with the Soviet Union had a significant effect on the U.S. economy, dictating the allocation of the nation's resources and the scope of its defense budget. In the second half of the twentieth century, the U.S. defense budget soared owing to the various wars fought to contain the spread of Communism and to an arms race in which the rival superpowers stockpiled nuclear weapons to deter the other from direct military engagement. Ultimately, the Cold War ended because the United States militarily outspent the Soviet Union in the 1980s, breaking the Soviet economy but leaving the U.S. federal government trillions of dollars in debt. Read more ..
After World War II (1939–45), the U.S. economy entered an extended period of prosperity, a postwar boom that lasted from 1946 to 1973. Before the war the U.S. economy had experienced the severe economic downturn of the Great Depression (1929–39). Increased production to support the Allies after war broke out in 1939 boosted a recovery, which continued after the United States entered the war in December 1941. Before the war drew to a close, policymakers began taking measures to avoid a repetition of the brief period of economic stagnation that had followed World War I (1914–18), and in July 1944 delegates from the allied nations met at Bretton Woods, New Hampshire, to establish a method for stabilizing the international economy. After the war, the United States established the Marshall Plan to help rebuild Europe, rather than burdening the losing nations with unmanageable reparations, as the Allies had after World War I. Domestically, U.S. consumers went on a buying spree, using their wartime savings to purchase products, such as refrigerators and automobiles, that had not been available during the war. The boom ended in the early 1970s owing to a number of factors, including changes in U.S. fiscal policy that undermined the Bretton Woods reforms and an oil embargo that was imposed on the United States by the Organization of Petroleum Exporting Countries (OPEC). In the waning years of the Great Depression the United States had developed a technological lead on the major European countries, but those countries closed the economic gap in the postwar period, and by the early 1970s they had caught up both economically and technologically.