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Course of the great depression
Economic effects of the great depression
Great Depression and its impacts on economy
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Throughout the many years of the Great Depression, the American economy plummeted greatly because of ongoing issues throughout the United States. The American market, and essentially continuously buying, are what keeps an economy in any country moving. The points at issue which allowed the economy to go down consist of three major factors. All three of these aspects took a great amount of citizens down along with all of their profits. Families, businesses, and employees struggled to stay standing during this time period.
The next bargain was the fiscal bargain, which was used through around the period of the 1700s up until the 1800s and further. The concept of the fiscal bargain was about rulers needing a larger amount of resources. To obtain these resources, they follow through with expanding on their core bargain with their people by exchanging an expansion on privileges, legal rights such as economic infrastructure, and an expanded internal security, for military power. Fiscal bargain is what makes it possible to have a linear military in which there is an exchange with subjects for there to be a permanent taxing and debt tied to them for the future of the state. This is what makes it possible for there to be giant militaries of over 200,000 soldiers as
The wealth during the 1920s left Americans unprepared for the economic depression they would face in the 1930s. The Great Depression occurred because of overproduction by farmers and factories, consumption of goods decreased, uneven distribution of wealth, and overexpansion of credit. Hoover was president when the depression first began, and he maintained the government’s laissez-faire attitude in the economy. However, after the election of FDR in 1932, his many alphabet soup programs in his first one hundred days in office addressed the nation’s need for change.
The Republican party also contributed to the economic growth. They lowered taxes and made tariffs higher. Lower taxes allowed people to have more money in their pockets to spend on other things in the future. The increasing price of tariffs caused more citizens to buy more American goods therefore also benefitting the Economy. The 1920’s was considered to be a time the government just let things operate as they pleased.
The government role expanded from 1877-1920 because of all the power that was being abuse by the rich. For a long time, the country dealt with inequality, such as paying anyone who was not a white man less and over working them. Not only was abused power and inequality pay depending on your color or gender or age a problem but the food was being processed with chemicals that made people sick and in other cases die. The growing of the government is good because it shortened work hours for women, made it safer to eat meat and other foods, and dealt with politicians who bought their way to office.
During the 1920’s Canada’s economy prospered, since many countries recovering from the horrors and especially damages of the war, required Canadian products. Canada’s abundance in resources such as pulp, forestry, wheat and mining greatly contributed to Europe’s recovery as well as the Canadian economy. Throughout this decade, many products and resources became more available such as cars due to mass production techniques developed to meet the product demand. For instance, the vehicle ownership rate in Canada increased from 300 000 in 1918 to 1.9 million by 1929.
With the dawn of the automobile and the age of consumers the economy in the 1920s was about to boom. Branding and marketing became huge in the 1920s and everyone was spending. Everyone wanted to have the latest thing, people began to compete with
The great depression is an immense tragedy that took millions of people in the United States from work. It marked the beginning of involvement from the government to the country’s economy and also the society as a whole. We still feel and deal with the ramifications from the laws and policies made to get us out of the economic drought and ensure it never happens again. There is a huge contrast between the 1920’s and the 1930’s as the what they call ‘The roaring twenties” was full of prosperity and wealth due to the destruction of Europe and its economy after World War One. The 1920’s were truly crucial for the U.S as it is when it becomes a truly modernized nation.
The tax reforms of the 1920’s were the answer to the extraordinary high rates the government had imposed during World War I. Permanent income tax had only been a part of the American life for less than a decade. Income tax was introduced to the American public in 1913 at a low rate but increased to over 70% to sustain World War I. The war ended in 1918 after four years and left America in a bad place. National debt was high, work was difficult to find, and wages were low. Warren Harding ran for office in 1921 with the former Massachusetts governor, Coolidge, as his running mate.
The Great Depression was a major turning point for the United States’s economy because it changed the relationship between the government and the economy. Before the Great Depression, the economy was a Laissez-faire style market where the government had no influence on private party transactions and businesses. After the Stock Market Crash of 1929, the people of the United States sought for reliefs from the government. The Government responded by creating tax reforms, benefiting the stock market, wheat prices, employment, and the number of bank suspensions, and providing comfort for the people. As a result of their disparity, the people put their trust in the government in hopes that they would repair the broken economy.
If you got lucky and did not get fired the wages fell and the buying power increased. The americans that were forced to buy on credit fell into debt,and the numbers of repossessions and foreclosures increased steadily. The gold standard fixed currency exchanged around the world, and helped spread economic distress from the U.S. through the world.7When the country elected Franklin D. Roosevelt he promised he would create federal government programs to end the Great Depression.8 The federal government programs allowed people to get more jobs and help the economy increase. Roosevelt was a big influence during this time period and impacted many people, giving jobs to citizens and boosting the economy. After Franklin Roosevelt created the federal government programs it allowed the economy and society to grow and strength from the unlucky situation.
In 1929, the U.S. was hit with the worst economic crisis in the history of the country, the Great Depression. The Great Depression left millions of people unemployed and cost millions their life's savings. The Depression lasted for ten long years for the American people. Since the Great Depression ended, people have studied it, trying to figure out what happened that started it all. The problem was, in fact, the poor economic habits of the people at the time, such as speculation, income maldistribution, and overproduction.
During the time of the Progressive Era in 1900s-1920s, the majority of the American believed that the industrialization, immigration, and the urbanization had produced critical social disorders and believes that reforms were needed to reshaped America. They also believed that it was time to eliminate the problem caused by the corruption in the government and promote the improvement in order to address the social and economic problems. People like Theodore Roosevelt and W.E.B.Du Bois also accepted that change was needed to improve and grow. The major changes were made in social, economic and political reforms. But, was the Progressive Era a success?
A major difference between the 1920s and the 1990s economy boom and bust was the monetary policies that were in place at the time. The United States in the 1920s was on the gold exchange standard and in the 1990s America was on a floating exchange rate (Meitzer 2000). Throughout most of the 1920s decade the American dollar was undervalued. Many argue that the gold exchange standard was partly to blame for the boom in United Sates economy which led to the credit bubble and stock market crash of 1929 (Bernanke 2001).
President Hoover thought the government should take responsibility for this depression (De Long, 1998). This was when it surfaced to curb inflation and help the unemployment status with the use of tax control. By doing this, increased taxation had a positive effect on the economy. Using funds directly where needed helps target the problem.
