Causes and Effects of the Great Depression

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The Great Depression was a dark period in the history of theUnitedStates,affecting all the socio-economic sectors of the Americans’ lifestyle. It suppressedgreatly the economic status of the UnitedStates. The new dealof President Roosevelt has been accredited for saving the U.S out of theeconomicturmoil it found itself into. This aimed at provision of relief as well as employment opportunities, which helped to initiateeconomicrecoveryalthough it was not completely achieved until nineteen forty one as ammunition industries prepared for the Second World War (Burg 103). The causativefactors of the Great Depression are still a debatable issue for historians and economists. For many people however,the period is attributed to the stock market crash of 1929. However, there lacka consensus about the causes of the economiccrisis which worsened into a depression. May be some of the most important questions to ask while analyzing the causes of the great depression includes questioning on the reason why the citizens were overconfident in the stock market prior to the great depression, how the consumption psychology structured the causes and impacts of the crash, the patterns of investment in the stock market in 1920s, the main investors and Hoover’s reference of an economic crisis as a depression. This paper shall analyses the probable causes of the Great Depression and its impact. Herbert Hoover In 1928, Herbert Hoover was elected into office as the president of the USandthe citizens remained optimistic and confident in the American economy. They foresaw a national prosperity as Hoover declared that the nation was finally winning the battleagainst poverty than in any other time of history (Irwin 11).This fueled the optimist of the American citizens as theeconomycontinued to prosper. One way to fight poverty was to invest in the stock market. Prior to 1929, the stock

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