Economic And Economic Impact Of The Great Depression

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The Great Depression was a period in the United States between 1929 all through the 1930s that saw many Americans lose their jobs and turn to the government for assistance. The Stock market crush of the 1929 saw thousands of banks and financial institutions to their knees. With that many lost their hard earned savings that had been in the Banks. The Great Depression was the period in which America’s long time economic policy of a free market economy went to its knees. It is significant to note that America has always supported the Laissez Faire policy where enterprises and other business entities are allowed to operate freely provided their actions are in conformity with the government policies and procedures. The policy of Laissez Faire can…show more content…
In many economies in Europe during the Great Depression, there were lack of welfare programs hence it was difficult for many to jump out of the poverty cycle. For instance, during the Great Depression, the poverty levels in Canada was almost 23.5 percent. Lack of proper distribution of wealth led to the loss of massive wealth in the United States. With the government’s policy of Laissez Faire, there were no rules, regulations or procedures that were used to monitor the amount of wealth one could acquire. With excess wealth, the little tycoons sought to save their money in banks instead of re-investing it to the economy.
The Stock market crush led to the loss of massive wealth from few individuals who would have been compelled to re-invest part of their wealth had the policy of Laissez Faire not taken effect. From the above statement, it is prudent to understand that lack of regulations on the side of government caused the Great Depression (The United States Turns Inward: the 1920s and 1930s). From the onset of the rise in wealth and enterprise expansion in the 1920s, the government ought to have formulated economic policies that would regulate and foster distribution of wealth among
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Economically speaking, it would have been better if the money was distributed in the hands of the Middle and the lower class instead of saving it in Banks. Henceforth the Stock market crush of 1929 led to the loss of huge amounts of savings and wealth from the few tycoons in America. In conclusion, it is worth mentioning that the Great Depression did not only affect the United States economically but also socially. With the onset of the Great Depression, the Gross National Product of the United States reduced drastically. As a result, the government was unable to afford offering social programs to its citizens. Many lost their homes since they had no jobs to pay and offset their mortgage loans. Agricultural prices of raw materials also increased hence farmers were forced to spend much in ensuring
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