The Great depression

The Great Depression Do you think you’d be able to survive during a time when people could barely make enough money to put food on the table? The Great Depression is known as the worst and longest economic crisis to hit anywhere. This was the period in which the highest unemployment rates and low incomes were experienced by the industrialized Western world. The financial crisis affected virtually every section of the economy, and therefore, affected the livelihood of people everywhere. It led to factories, banks, and major business entities collapsing, leaving thousands of people jobless and with no money to put food on the table. The depression began in the United States on October 29, 1929 dubbed Black Tuesday, immediately after the crash of the New York stock market. There was also a fall in the world market. It was truly a gargantuan depression. There was a curtailment of income, the means of exchange were frozen in the currents of trade, and there was a drastic decrease in employment rates. Due to the collapsing of several companies in the Unites States, there was, as a result, a decrease of the demand of goods and services they were offering. For the companies to lessen costs of operations, they had to lay off employees and also for this reason, reduce salaries and benefits of those who were sustained. The loss of jobs in the economy led to rapid unemployment. It got so serious, the government had to intervene with policies such as: The First New Deal, the NRA, The AAA, The FERA, and The Social Security Act just to name a few. There was a sharp fall in the world market, when many countries tried to increase their taxes as a way of trying to save their domestic industries. The depression hit hardest to those nations that were severely in debt to the United States, for exemplar, Germany and Great Britain. In Germany, unemployment rates rose rapidly, beginning in late 1929, and by 1932 it had reached over six billion people unemployed, or twenty-five percent of the work force. Great Britain was less affected, however, its industrial sectors remained seriously depressed until after World War II. The effect of the crisis also led to several states and countries changing their leader in hope of new ideas to tackle the problem. In conclusion, The Great Depression was caused by underlying weaknesses as well as imbalances within the economy that had been obscured during the abstract euphoria of the 1920s.The Depression exposed those weaknesses, and the inability of the nation’s political and financial institutions to deal with the vicious downward cycle that had set in by 1930. Before the Great Depression, governments traditionally took little to no action in times of business downturn. However, market forces proved unable to achieve the desired recovery in the beginning of the Great Depression. This discovery eventually caused some fundamental changes in the United States economic structure. After the Great Depression, government action, whether it was in the form of industrial regulation, public works, social insurance, deficit spending, taxation, social insurance, or social-welfare, came to take a principal role in ensuring economic stability in industrial nations with market economies.