The Great Depression Essay – One of the most important eras in American history in the modern era is the Great Depression. The term “Great Depression” refers to an economic and psychological catastrophe in the United States and certain European nations. Although there is a worldwide economic crisis, the United States is often mentioned when using the word. The 1929 world economic crisis, which had the largest impact on the United States, marked the start of the Great Depression.
The crisis’s severe stage stretched for three years, from 1929 to 1932 and into the first quarter of 1933. It took until 1939 for the economy to fully recover from the crisis. Because of its length and severe effects on society, this period is known as the Great Depression.
There are several explanations for the US economy’s recession, all of which complement one another. This Great Depression essay focuses on the origins, effects, and explanations for the Great Depression’s protracted length.
The United States went through an incredible economic boom at the start of the 20th century. The share prices of the biggest firms were steadily rising. Production output and consumer loan volume both significantly rose. Almost everyone was employed, and the economy as a whole was booming.
The working population’s unemployment rate was about 4% to 5%, and the average wage was constantly rising. Both leaders and common citizens thought that future economic development in the United States would be similar. However, the 1920s saw a significant shift in the situation. Even now, historians and economists disagree on the potential roots of the current financial crisis.
The American consumer revolution and the next speculative bubble were linked to the 1920s. The stock market was expanding at the fastest rate at the time. While transaction volume climbed from two million shares per day to five million, the average value of the securities increased by 40% annually.
People who were fixated on becoming wealthy bought all of their savings in corporate stocks to resell them at a higher price in the future. Demand generates supply, as is well known, so the value of securities increases geometrically. Americans were unaffected by inflated stock prices. The investors actively borrowed money from the banks to buy the assets.
The overabundance of products was another factor in the crisis’ growth due to the market’s organic growth and the existence of large amounts of unregulated capital, the production of all goods. The population’s purchasing power did not match the number of commodities produced and available on the market.
