How did the end of the war bring social and economic instability to the US and world in WWI?

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The end of WWI brought about economic instability for the whole world. The sudden end of the war did not give the United States enough time to transition to a consumer-driven economy. As a result, the prices for food and clothing increased so much that it was an election issue in 1920. Farmers and speculators had done well during the war by selling wheat to war-torn Europe; the sudden end of the war meant that prices fell and farmers began to plant more in order to pay off loans they took out for machinery and more land during the war. As a result, the price tumbled more. The tilling of marginal land in the Great Plains would become one of the leading causes of the Dust Bowl. Farmers were losing their land well before the Great Depression started officially in 1929. Millions of American servicemen returning home often had no job to return to, and many resented the munitions workers who made more money than the soldiers who were actively using the munitions. Business was able to use patriotism in order to cut down on strikes and the ensuing Red Scare after the war made life difficult for the worker who hoped for better wages.

Internationally, the war made a shambles of the European economy. Britain and France were heavily in debt to the United States, and they leaned on Germany to help pay the bill. The German economy was essentially ruined, and it was once a major import and export market. The Russian economy was closed during the early days of the Russian civil war and the United States would not officially recognize the Bolshevik government under the Franklin Roosevelt administration. The Republican presidents who came after Wilson—Harding, Coolidge, and Hoover—enacted heavy protectionist tariffs, most notably the Hawley-Smoot Tariff during the Hoover administration. This put Europe further behind in terms of paying its debt, and it reduced the purchasing power of one of the United States's most valuable trading regions.

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