For example, spending was lessened and investment was dropped. Businesses went through a downward spiral, and unemployment skyrocketed. When The Great Depression reached its climax more than 14 million Americans were unemployed, and many banks closed. The Great Depression brought about emotional anguish and physical suffering to many Americans. Yet, the United States Government was able to be an aid
Many historians believe that the immediate cause of The Great Depression was the Stock Market Crash in the fall of 1929. That event occurred on October 29, 1929; also known as Black Tuesday. It also marked the end of the era known as The Roaring Twenties. On that day stocks plummeted to an all-time low, causing mass devastation. However like history has shown, a time of economic prosperity, like the Roaring Twenties, result in a depression.
The Great Depression All economies experience both expansionary and recessionary periods throughout their history. However, until most recently, the one recession that has had a well-known impact around the world is “The Great Depression of 1929”. The Great Depression is a great example of how horribly the world’s economy can collapse. This recessionary period is directly correlated with the United States Stock Market Crash on October 29, 1929 which is also known as “Black Tuesday.” This recession affected industrialized countries worldwide making it become a global recession. The main misconception of The Great Depression is that it was a sudden and consistent collapse in the stock market.
These days are considered the most tragic days in the American economy. These days began the “New Era” or a time of low unemployment when general prosperity masked vast disparities in income. John Maynard Keynes said” The extraordinary speculation on Wall Street in past months has driven up the rate of interest to an unprecedented level” Bierman Jr. 1). “There is a warrant for hoping that the deflation of the exaggerated balloon of American stock valves will be for the good of the world” (Bierman 1). It started as the Dow Jones stock dropped twenty three percent on Tuesday October 29th; this resulted in a loss of $8-9 billion
The Stock Market Crash, which coincided with the Great Depression, allowed for further suffering, especially great financial toil. Bentley and Ziegler sum up the accounts of misery well, stating that the “stark, gloomy statistics…do not convey the anguish and despair of those who lost their jobs, savings, homes, and often their dignity and hope” (Bentley-Ziegler 988). Similarly, Harman adds, “The slump tore apart the lives of those who had been
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.
Unemployment percentages were at an extreme high and this failure to regulate money throughout the economy drove down the economy. The overproduction which initially started this downwards spiral effect can be recognized as a very important cause to the start of The Great Depression in
Right now in America, we are in an economic crisis that is slowly tearing the seams that holds the country’s banking system together. This ‘recession’ affects everyone from single families to giant corporations because of the nature of the crisis. It began slowly, and is now moving quicker and quicker, with no apparent end in sight. It seems that everyone in America played their part in a tedious game that only took a matter of time to come crashing down around all of us. This crisis began to happen in 2007 when the rate of sub-prime mortgages and lending skyrocketed because of a bubble in the housing market.
As unemployment reached an all time high in 1933, this decade, was squished between the roaring twenties and World War II, and was left little to be highlighted other than the dismal consequences of the Great Depression. An all-time low in American confidence, the years between 1929 and 1940 tested the strength, courage, humility, and perseverance of those forced to suffer a quickly dropping economy. No longer did hard work transform into success or even hope. Middle class working families now joined the ranks of the poorer classes and farmers hit by the Dust Bowl in the 1920's. The enormous unemployment disrupted family structure as it forced the male provider shamefully into bread lines.
The Great Depression was a macroeconomic catastrophe that had far-reaching effects into nearly every sector of the worldwide economy, causing high rates in unemployment and declines in output, prices, and personal income in most industrialised nations. Due to the tragic nature of the period, much time and energy has been spent examining the causes that led a recession similar to other historical episodes to become a long lasting and infamous depression. Recent research indicates that while fiscal policy failures most likely initially brought about an economic downturn, it was deepened and prolonged by the failures of central bank monetary policies due to inaction on the part of the Federal Reserve (Bernanke, 1983). However, detractors from this monetarist position claim that the problem relative to money in the economy at the time was actually a result of the problematic interwar gold standard (Hamilton, 1987). By first examining the monetarist view as advocated by Friedman and Schwartz then examining the gold standard hypothesis, it becomes clear that while a substantial fall in money supply did occur during the years of the depression, such a fall should be attributed to the difficulties encompassed by the international gold standard rather than irresponsibility and inaction on the part of the Federal Reserve (Friedman and Schwartz, 1993; Eichengreen 1992).