What was the Great Depression?
How it works
The Great Depression was a dramatic shift in the US economy leaving people homeless and people didn’t have a way to make a living. .This made the government create new programs called the New Deal it however failed to stop the Great Depression and these programs wasted a lot of money..The Great Depression started in 1929 it was the biggest economic downfall in US History it left a lot people without jobs and banks started going out of business all over the country.
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Overproduction and Underconsumption led to companies making an abundant amount of products without people buying them. The farming industry was a big portion of how the US made money. So when Farmers started to over produce in hopes to make more money this made people still bought products but there’s was still a lot of products in stock. Farmers wasted tons of money on useless crops this eventually collapsed the US economy (Document 3). Consumers spent so much money on installment buying people started to run out of money and business had to start lowering prices on goods. The consequences was the Great Depression hurting millions of people (Document 1). Overproduction and Overconsumption also led to family income rates going down because when people start purchasing products, families don’t have as much money as they did before (Document 2).
How it works
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Margin buyers had a big effect on the stock market eventually leading to the Stock Market Crash which was the first day of the Great Depression. As more and more putting money into the stock market people started losing tons of money. People didn’t know how much money affected the country. When there was no more money left to put on stocks the market started to slowly decline until there was no money left (Document 4). After this no money could be put in the stocks, and companies couldn’t sell their products so they had no way to make money this left goods still sitting on the shelf and the fall of lots of big business (Document 3). Along with people putting margins on stocks at the same time installment buying was a huge issue. People started putting more money of the installment quicker than the income knew what to do with it, leading to confusion and the collapse of the economy (Document 1).
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World War I caused a lot of money to be wasted by the US government by giving to other countries. As you can tell Americans weren’t wise with the use of their money. The destruction caused by World War I was horrible, leading to the US lending over money to countries in europe for relief. They gave billions and billions of dollars causing a big economic blow to the country (Document 5). Money was wasted in all sectors from the US economy like Stock buying people were investing in companies but as people stopped bringing in money this left companies in a drought with nothing to do because they wasted all their money (Document 4). Farming industries weren’t mindful with money and it hurt the companies and this led to a decline with the money spent in World War I and Stock margins (Document 3).
The Great Depression collapsed the economy and caused a lot of struggles for people but mostly business and banks overall because that’s how the US produces most of its money. This was definitely the lowest point in American history people didn’t have proper resources to have a good quality life, this caused Americans to go into a frenzy people demanded and wanted money. This wasn’t the life people were used to living in America.