How Did The Great Depression Affect The Economy

Allie Blain
The Recessions of the Great Depression-Rough
The Great Depression affected the United States economy because they went into an economic recession, which led to a loss of confidence in the general public. This was a hard time for everybody, and when tough times call, you can only press your luck so far.
It all started when the U.S. Economy had the Stock Market Crash on October 29, 1929, also known as, “Black Tuesday.” The Great Depression followed almost a “decade of spectacular economic growth.” There was a “general slowdown in economic activity.” This sent the United States going in to the longest and darkest economic depression in American history. Every few years the Gross National Product & total of all goods fell with billions
of dollars. In 1932, industrial production began to barely revive. The first two years, the President relied on businesses to voluntarily maintain production and payrolls. He created a loan agency called the Reconstruction Finance Corporation, which then became an essential agency of the New Deal. The New Deal was also to help counteract the effects of the Great Depression. On October 24, also known as “Black Thursday,” the market “lost 11% of its value at the opening bell on very heavy trading.” With many Wall Street bankers trying to help alleviate the chaos and panic from everyone, and with credit to over-indebtedness, over-speculation was used a lot, actually, too much during this time. With economists buying only a percentage of stocks, they were never able to pay back the amounts in enough time.
The general public had no confidence after the Wall Street Crash.
They thought economy could never get better, and that their life was over. They had a reason to lose hope because there was mostly unemployment with workers having to move in and out of having a job and losing jobs for months. They had to save, borrow, and even beg to avoid “severe hardships,” depending on government and charity. Unemployment reached 25% during this time. Before the crash, the 1920s was “a time of wealth and excess.” And despite the fact that speculation was becoming dangerous, many thought the stock market would “continue to rise indefinitely.” Since the total opposite happened, no one knew what to believe. The rich had no impact during these hard times; they were actually oblivious to the suffering of everyone else. The Rockefeller family was one of the “financial giants” that bought large quantities of stock, showing the public that they had confidence in the market; this only led the large decline to fail to stop. So many people depended on wages and salaries because of the loss of jobs. This had a negative impact on the hope for a family to stay stable, and on individuals’ health and well-being. The “psychological, cultural, and political repercussions” of the Great Depression impacted significantly in different countries including the Nazi Party in Germany, because they had become associated with the economic turmoil. Presidents that came and went throughout this calamity tried their
best to help gain back the confidence of the general public, which could never be enough for the economy. There are three phases of the depression: economic disaster and personal misery.
Many thought the Great depression could not happen. Second, President Roosevelt made a complex series of government programs to put people back to work. The third phase was the outbreak of The Spanish Civil War. By this time “numbers of jobs multiplied rapidly.” During the recession, the stock market prices continued to fall. But as it continued, economists made the federal government increase spending, in order “to provide employment.” Unemployment is very high during a recession. This is because after the war, families became bigger, and everyone wanted many products. These people started to buy these products on credit, overloading the market, making money seem almost worthless. There wasn’t enough money to pay all employees fairly. There was money that existed to pay most of the employees. Effects of recession were felt everywhere, making the Great Depression one of the greatest economic calamities in
history. Many people believe that their future had faced limited opportunity. The Depression makes the public lose the feeling “individualism, the sanctity of business, and a limited government.” When the confidence of the American government went down, so did the United States citizens. When the Stock Market crashed, it affected the government and its people causing the citizens to not only lose their jobs, but their family. Although it is very possible to have a recession, as there have been throughout the years, luckily, today we should not expect another Great Depression because the global economy has come together to make sure we are safe.