Social And Economic Causes Of The Great Depression

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The Great Depression was the worst collapse in American economic history. Most people believe that it was caused by a crash in the stock market, but that’s not all. The culture and events that occurred after the Great War and the 20’s resulted in the crash. Many people fell into debt and lost their houses and became poor. People that once thought they had everything had nothing. There were many social factors and economic factors that led to the Great Depression. To start, there were several social causes that led to the Great Depression. Many Americans were worried about immigrants and wanted to restrict them from entering, which led to foreign affair issues. Additionally, there was unequal distribution of wealth. The rich were …show more content…

After the Great War, many Americans wanted a fresh start and wanted to live in the present instead of the future. The use of credit helped propel this idea forward. Credit allowed people to buy expensive items and pay it off later. Items that were once luxuries became necessities to many middle class Americans. Because of the growing separation of the rich and the poor, credit allowed the poor to appear wealthier than they were. Spending went up about 50%, while incomes went up only 12%. This caused people to go into debt. Consumerism was a major factor in the cause of the Great Depression but not the only one.
Another common cause of the Great Depression is the combination of overproduction and underconsumption. As a result from isolationism and prices dropping, many businesses were producing too much. Because of the low income, business started to lay off workers. Many business failed and countless were left unemployed. Their supply went up but their demand went down. In return, businesses were in debt and lost a ton of money. This damaged the economy and hurt millions. As a result, overproduction and underconsumption left a lot of business in debt and caused the Great …show more content…

The clash of cultures and the First World War led people to live in the present and not think about their future. It also made Americans nervous about foreign affairs. They formed groups that were against immigrants and then Congress passed tariffs that restricted them entering our country. This led to the U.S. becoming isolated, which caused us to go into debt. Additionally, the use of credit allowed people to buy expensive luxuries and pay it off later. This resulted in consumerism which also brought many people into debt. Lastly with the high tariffs on America from European powers led to business overproducing and under consuming. All these factors eventually dragged the United States into the Great Depression.
To conclude, the Great Depression wasn’t just a fail in the stock market, it was a combination of social and economic factors. Isolationism, made us overproduce and under consume, which resulted in a loss of jobs and money. Consumerism led people to buying expensive things that they don’t need and regretting it later. The Great Depression not only affected business but also everyday Americans. In all of American history, the Great Depression was the worst economic collapse that severely affected