The Booming Of The Economy In The 1920's

Although the economy was booming, because of the introduction of purchases on credit, it also led to a lot of debt “The debt jumped by 150% from 1930 to 1939, when it was at around $40.44 billion (about $673 billion in today's money.)” according to theatlantic.com and advertising along with the rise of consumerism led people to buy more stuff which led to more debt “Millions of Americans used credit to buy all sorts of things, like radios, refrigerators, washing machines, and cars. The banks even used credit to buy stocks in the stock market. This meant that everyone used credit, and no one had enough money to pay back all their loans, not even the banks.” According to okhistory.org. Therefore the economy was doomed to fail and

According to corporate.ford.com “An important outcome of the moving assembly line was the drop in price for the Model T. In 1908, the car sold for $825 and by 1925 it only sold for only $260, making the car more affordable to individuals everywhere.” This shows that due to the price decrease in the Model T, there were many more people that could afford the Model T which leads to an increase in sales, and because of the installment payments, more people would buy leading to more debt. Another point to add about Ford is “Similar installment plans were offered to buyers who could not afford the lump sum, but could afford "twelve easy payments." Over half of the nation's automobiles were sold on credit by the end of the decade. America's consumers could indeed have it all if they had an iron stomach for debt. Consumer debt more than doubled between 1920 and 1930.” According to ushistory.org, this shows how people in the 1920s built up large amounts of debt right before the great depression happened. Another reason people were purchasing so many items was because of the increased

According to guides.loc.gov “By the end of the 1920s, an increasingly sophisticated advertising industry had integrated new techniques in retail, credit, sales management, and consumer research into the marketing process. Marketing efforts accelerated to match businesses' rapid introduction of new products and services to satisfy consumer markets.” This shows the effort that went into producing advertisements to get people to buy items they didn’t need on credit. This increase in advertisements led more people into debt because they thought they could afford all of this stuff when they couldn't because of the installment plans. Another piece of evidence that supports this point is “The more these goods were advertised, the higher the demand they received. Increased demand meant more workers were needed, so more Americans were receiving wages. These