Essay The State Of The Union Address

895 Words Nov 18th, 2016 4 Pages
Although economic indicators, such as GDP and personal income, clearly mark periods of economic decline or growth in modern times, economic data has not always been available to accurately measure these indicators. In such cases economist turn to proxies to try and glean information about the economy of a certain time period. One such proxy is the State of the Union Address, given annually by the president of the United States. The President consistently addresses the economic situation during his speech and economist can attempt to use his description to gage whether a period in time was economically prosperous or sluggish.
Economic data shows a steady decline in GDP occurring in the early 1930’s followed by a rapid rise in GDP beginning in the 1940’s. The United States entered the throes of the Great Depression caused by the collapse of the stock market and subsequent bank failures. With the dawn of World War II and the ample opportunity for employment in the military and military industrial jobs, the U.S.’s GDP began to rise rapidly in the 1940’s, as it worked its way out of the Great Depression. The following graph shows the decline of GDP in the 1930’s followed by a rapid rise in the 1940’s.
Similarly, personal income was greatly affected by the Great Depression and World War II. Income fell rapidly in the early 1930’s as businesses went bankrupt and other employers cut wages and employees in order to save money and remain afloat. As the New Deal began to take shape in…

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