How did the buildup of savings during WWII help prevent a postwar depression?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The buildup of savings did this because it meant that after the war, people would have lots of money saved up that they could use to buy consumer goods.  Once the war ended, the factories would have to turn from producing war materiel to producing consumer goods again.  If people had little money, there would have been little demand for these goods.  But during WWII, people saved a great deal of money.  Once the war ended, they could use that money to buy things like cars that had not been available during the war.  This flurry of buying prevented a depression.

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