What Was Coolidge Prosperity?

As a result of his commitment to balancing the federal budget and his business-friendly policies, President Calvin Coolidge successfully strove to maintain the economic good times the United States enjoyed between the short depression that occurred immediately after World War I and the Great Depression. Other characteristics of "Coolidge prosperity" included rising wages, declining unemployment, decreasing inflation and a bull market.

While many Americans also attributed the Coolidge prosperity to his tax cuts on the wealthy, other say it was a result of wartime spending. Another contributor to the economic good times during the Coolidge presidency, and a factor that had little to do with the president himself, was the ability of industry to produce and ship goods on a large scale, thanks to technology, automation and electricity. This helped create jobs in manufacturing and transportation.

The market was so flooded with goods that banks and other financial institutions began extending credit to more average Americans in hopes of stimulating consumption. By the end of the 1920s, roughly 50 percent of Americans owned radios, automobiles and a variety of appliances. Despite the fact that most workers saw their wages increase by an average of 22 percent during the Coolidge years, the gap between rich and poor widened considerably during that time.