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Explain the Causes and Effects of the Great Depression.

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Introduction

Explain the Causes and Effects of the Great Depression By: Liran Morav The Great Depression was one of the most significant periods in American history. It came as a blow to the American people who were used to living in the "American Dream" (Paul. A., 1996, p.1), or the "Roaring Twenties". The Depression was described as "The Rise and Fall of a Nation" (Tower Records, 1998). Lasting for about a decade, it is still considered to be "The worst economic slump ever in US history" (Paul. A., p.1, 1996). This essay will examine the causes of the Great Depression, and its effects on USA. Perhaps the events that most clearly associated with the Great Depression were the Wall Street crashes on October 24th and 29th, 1929. Although not acting as direct causes of the Depression, they worsened it to a horrible extent. The Crashes were inevitable. Premature market Speculation was common throughout the 1920's, and it artificially increased shares' value, allowing many Americans to become rich. It was only a matter of time until investors realized they were investing in what Aaron Gibes (cyberessays.com, 2002), an economist during the Depression, called "markets that were only prosperous 'share-wise' ". Along with market speculation, the "Credit System" also made the crash inevitable. ...read more.

Middle

p.5). Finally, what perhaps made the Depression inevitable were the American government's "Laissez Faire" policies. The Republican party in government prior to the Depression believed the economy would perform best if left untouched. As a result, there were no welfare systems for the poor and unemployed. Nevertheless, the Republican policies of 'Rugged Individualism' were widely popular among the flourishing businesses of the 1920's. When the Depression hit USA in 1929, the government was unable to deal with the sudden amount of hungry, poor, and unemployed. Instead, it assured people "the ship would right itself" (socialstudieshelp.com, 2002) and that "prosperity was just around the corner" (Edgar Hoover to a group of businessmen in 1932). These, in turn, were forced to rely on charity to survive. "By the time Hoover [Republican President] recognized he had to do something, it was too little or too late" (socialstudieshelp.com, 2002). Perhaps more significant than the causes of the Great Depression are its effects. These, like the causes, were quite numerous. The most obvious effects of the Depression were the widespread poverty and unemployment. By 1933, 25% of the American workforce was unemployed (Brooman. p.30, 1997). Since no welfare systems existed in USA, many Americans who lost their jobs and money were forced setup in shanty towns called "Hoovervilles" (see illustration #1 on the right). These were named after president Hoover, the Depression's scapegoat. ...read more.

Conclusion

p.29, 1997). Decreased exports and therefore world - wide industrial decline meant that unemployment increased in Europe, along with poverty and political upheaval. The chief European victim of the Depression was Germany, where unemployment reached nearly 40% of the workforce (Encarta.msn.com). The final effect of the Depression was the end of the thirteen year long Republican rule. Most Americans blamed the Depression on the government, and chiefly the president. Slogans such as "In Hoover we trusted, now we are busted" were circulated all throughout the country. Americas wanted a change, and in November 1932, they got it. Democrat candidate, Franklin D. Roosevelt (see illustration #2 on the right) was elected president, beating Hoover by a 20% margin. Roosevelt was elected under his promise of "A new deal for the American people". The 'deal' was a series of programs aimed at stimulating the economy in order to pull USA out of Depression (cyberessays.com). The Depression was a tragic episode in America's history. Blinded by the excesses of the 1920's, Americans failed to perceive the early symptoms of the disaster. As a result, the Depression managed to inflict untold devastation on the American people. Unemployment, poverty, and homelessness were only some of the challenges USA had to overcome during those horrible ten years. The lessons delivered by the Great Depression will remain engraved as scars in America's history for many more years to come. ...read more.

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