They could also start up their industries again. This could only happen with loans from America. In October 1929, the price of shares on the ‘Wall Street Stock Exchange’ collapsed and many Americans and American businesses went bankrupt. Now at this time, America was still loaning Germany some money but as they became bankrupt, so did Germany because the USA had pulled back their loans to Germany and expected Germany to also pay interest. Germany then fell into a deep economic depression.
It is clear that some nations in the EU, namely Greece, Portugal and Spain have been living beyond their means for years, running deficits that are far too high, as well as neglecting their duties to not involve other nations in their debt issues. The big danger in fiscal consolidation is that it creates a downward, where falling demand and employment trigger declining tax revenues and budget deficits actually get worse instead of better. Further spending cuts or tax increases only worsen the downward spiral. A reduction in government spending and increase in taxes are withdrawals from the circular flow of income. This reduction in AD causes mass unemployment which could bring about deflation and interest rates will need to rise to control this.
That was partly why Hoover wad not reelected, but Franklin Delano Roosevelt was instead of him in 1933. Once he had the power many things changed in the government as he says he had to choose wisely. His reaction to the Great Depression was different from Hoover’s. In reaction he had set the New Deal, which had an impact on the government’s role in the United States. Franklin D. Roosevelt reacted to the Great Depression by establishing the New Deal.
In this essay I will analyse the extent to which Britain had an industrial depression after the year 1873, the ways this event ultimately materialised and why. During the mid-Victorian boom, Britain's export performance was greatly aided by the policy of free trade which was adopted by most economically developed countries at the time. After 1873, however, many European countries and the USA abandoned free trade and began imposing taxes on imported goods called tariffs. This resulted in domestic goods in other countries being effectively cheaper than the imported British goods meaning that foreign firms were less inclined to import goods. For example, Italy abandoned free trade in 1878, followed by Germany in 1879, France in 1882 and finally the USA in 1883.
The economic depression started in 1923 when Germany went through Hyperinflation. Many people struggled to make a living as prices were rising so quickly. Shortly after Hyperinflation in 1929 Wall Street in America crashed. This did not help Germany’s situation and once again many people struggled to survive with very little money. The people of Germany wanted a leader to help them and get them out of the devastation caused and unfortunately they backed Hitler.
The detrimental effects of the war in America where Britain had been humiliated had caused all these problems. The American war had only just ended when Pitt came to power. He therefore had to deal with the after effects that this war had caused, for example, Britain had suffered a loss of trade and an economical decline. Pitts task was to achieve stability within the country. He had to try and balance immediate revenue needs for debt reduction against overtaxing commercially important activities.
Although seen as similar or maybe the same they are not as the Wall Street crash is quite simply just one of many factors for the great depression ( The longest and most destructive recession of the 20th centaury)! Even though the WSC is a big factor in the great depression it is most certainly not the main reason for it as can be seen by the many other factors. At the time there was a more of a gap between those earning lots of money and those still struggling in relative poverty. An example of this is that in 1929 the tope 1 percent of Americans saw their income rise by 75 per cent; while the bottom 99 percent of Americans only had a 9% income raise. Even though production of goods increased by 50% it didn’t matter as people wages were not high enough and the vast majority of people did not have the disposable income to buy any luxuries with.
This would have placated political opposition, reduced the number of strikes and strengthened the security of the monarchy. Thus, Tsarism had a good chance of survival if the industrial boom continued. The war, however, checked any possibility of this as the economy heaved and inflation rose. Living standards deteriorated as food and fuel, used up by the army, came into short supply. Add to this the grief incurred, especially among the conscripted peasant population, by 4 million military deaths in the first year of war, and no wonder opposition to the Tsar climaxed.
Was the Great Depression the main reason why the Nazi party grew between 1929 and 1932? The Great Depression occurred in 1929 and affected Germany because America took all their loans from Germany so business’ close and the standard of living in Germany decreased. After the Great Depression, the public went to the extremist parties, the NSPD and the Communists. This was because the German government didn’t have a reasonable plan for amending the crisis – the Chancellor Bruning believed that decreasing government spending and increasing the taxes would get Germany out of their economic crisis. This angered the German public as they thought that the government’s plan would just make living harder if they did increase the taxes.
He also wanted to deregulate state and federal government requirements and liberate business and allow capitalism to flourish making people more prosperous and enabling them to pay more taxes, decreasing federal deficit. He also wanted to strengthen the nation’s defences. It can be argues that reaganomics was not successful in the years 1981 – 89 but it depends on who you ask, the democrats would say it didn’t work where republicans would say it did work. After the Great Depression the consensus was that the government’s main target should be to maintain a low level of unemployment. But the reaganites said that the low unemployment obsession had pushed up public expenditure and led to budget deficits and stagflation and they believed in supply side economics which emphasised growth.