Why Is It Possible To Live During The Great Depression?

“No one can possibly have lived through the Great Depression without being scarred by it. No amount of experience since the depression can convince someone who has lived through it that the world is safe economically.” -Isaac Asimov. In this quote, Asimov talks about a time where the US’s economy had declined and was in a bad place. This quote signifies the horrific events that had taken place during the Great Depression and how it had ruined the lives of many innocent people. Not only that, Asimov describes the Great Depression in a terrible way based on how he expresses the words, for which he expresses how people who have lived through the event would not fully consider that the world would be much safer or perfect because of how the Great
Depression had traumatized many people. The Great Depression started off as a recession then later evolved into a severe depression. During the recession, many stockholders began to overprice their shares and continue to sell them which led to the crash of the stock market. The Great Depression had begun in the year of 1929 on a “Black Tuesday”, days after the stock market had crashed, leaving more than 15 million people unemployed. The national unemployment rate went from 3% to 25% within the first years of the depression. The Great Depression had caused the unemployment of millions of people, because of the monetary policy, the maldistribution of wealth, and overproduction (industry and agriculture). The Great Depression was considered to be the longest time period, where the economy went into a severe depression, that ever occured in history.
One of the reasons why the economy took a dramatic downturn was because of the lack of worthy government policies such as the monetary policy. The monetary policy was a policy that was enacted by the Federal Reserve (FED) to avoid any panic or collapse of the economy. It was a policy that was enacted to increase the interest rates along with the increase in money supply as well. One of the many people that believed this policy would better the US economy was Milton Friedman, whom was a monetarist. He “incorrectly believed that the money supply determines the level of economic activity. In his view, an increase in the money supply will lead to more economic activity.” (Borowski). Before the Great Depression had occurred, the economy was booming because of the massive productions of products such as cars and telephones. This time period was considered as the “Roaring Twenties” because the US’s economy was the most richest of all the rest. So, the idea of the monetary policy was thought out to be a good idea until it had caused the stock market crash in the year of 1929. Friedman thought that the economy began to decline because of the Federal Reserve did not “print out enough money” (Borowski). Though, the Federal Reserve also began to boost the money supply which caused the poor decision making of investors leading to the
widespread of bad investments. Another reason that led to the severe depression was because of the maldistribution of wealth.
This resulted in the stock speculation for which many businesses underwent the time to increase their prices to sell stock. This led to the uneven distribution of wealth between “the rich and the middle-class, between industry and agriculture within the United States, and between the U.S. and Europe. This imbalance of wealth created an unstable economy” (Novel Guide). About 99% of the population had a 9% increase in their income, while the 1% had a 75% increase in their income. As a result of this, “[T]he top 25% of the population took in more than 55% of the national income.” (Novel
Guide).
One of the main causes of the Great Depression was the overproduction of agriculture in farms and manufacturing industries. Many of the industries were producing more consumer goods than the usual amount which led to the severe depression. In this quote, “[M]any people had financed purchases of consumer products with loans and credit, so after the Wall Street Crash it became almost impossible to pay off these debts. As the economic crisis engulfed the developed world, America was unable to sell these goods to Europe either” (History Learning).
During the Great Depression, more than 15 million people had lost their jobs which led to the lack of shelter and income for themselves and for their families. Many families yearned for a better lifestyle, though were not able to get because of the severe depression