$535 billion (2008 dollars)
It was December 1945. With the surrender of Japan some four months earlier World War II was finally over and, as with all wars, the victors assembled to negotiate the rules for divvying up their winnings. One such agreement, reached at the Moscow Conference of Foreign Ministers, called for dividing Korea in half at the 38th parallel. Furthermore, the United States and the Soviet Union would jointly occupy the country for four years, the Russians to the North, the Americans to the South.
Post WWII Occupation
During the course of those four years, however, the Soviet and American occupational forces, without the advice and consent of the Korean people, mandated new laws and policies designed to establish their own political philosophies - Communism to the North, Democracy to the South. With these policies in force, the two occupying countries unwittingly set the stage for the war that was sure to follow.
The new government edicts were rejected by the Koreans in both regions and only instigated tremendous unrest and resistance. With their protests left unchecked, this unrestrained disorder soon turned into even more violent insurrections, more deaths, and more rioting. Soon, massive strikes were called which only added fuel to the growing hostility and before long, rioting became routine and killings more commonplace.
In 1948, elections were held and with the obvious internal manipulations exerted by the Russian and American governments, a pro-communist leader was elected in the North and a anti-communist politician elected in the South, both determined to reunite the two countries, but under there own political ideology. The following year the Soviet Union and the United States ended their occupation and the two Korean countries were left to their own devices.
North Invades South
On June 25, 1950, the North Koreans became the first to carry out their threat. Equipped with Soviet tanks, their Army crossed the 38th parallel and invaded the South. Outnumbered in manpower and all other military resources, the South Korean Army was unable to repel their new enemy and was forced to retreat. With North Korea on the verge of success, the United Nations approved a plan to assist South Korea in preventing a communist takeover of their country. Ironically, the approval of this resolution was made possible only because the Soviet Union was temporarily absent from the Security Council and therefore was unable to apply its veto. Responding to the U.N. resolution, within days, President Harry S. Truman ordered the transfer of thousands of American troops stationed in Japan to South Korea. Also arriving on their shores were troops from a coalition of 15 other countries all under the auspices of the United Nations. The American troops were under the command of General Douglas McArthur.