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What was the Great Depression?
The definition for the
Great Depression is
a period during the
1930's when there was
a worldwide economic
depression and a mass
unemployment.
Causes of the Great Depression
There are many causes
of the Great Depression. One
major cause includes the
stock market crash of 1929. The
stock market crash occurred on
October 29, 1929. That December,
stockholders lost more than $40
billion dollars. When the stock
market began to improve a little
a year later, it wasn't enough.
We then entered the Great
Depression.
Another cause of the
Great Depression is the rapid
bank failures. Over half of
the banks failed throughout
the 1930's. That was over
9,000 banks across America
that closed down. The banks that
did not fail however, stopped
giving as many loans out. People
then did not have as many
expenditures.
When the stock market crashed, and the
banks began to fail, people from every
class stopped buying items. Since individuals
stopped buying items, this reduced the number
of items produced, which in tern, reduced the
workforce. The unemployment rate rose over
25%, and if you didn't have a job, you couldn't
pay your mortgage or even food. This lead to a great catastrophe.
The Current Situation
The causes of the Great Depression were
very severe. However, the United States
has fortunately not experienced these drastic
causes today. Yes, we have had a rise in
unemployment rates, but they haven't been
anywhere near the 25% that they were during
the Great Depression.
In our current situation, banks are not failing like
they did in the great depression. The banks today
however don't have additional money to give out
for loans. During the Great Depression, people took
out extremely risky loan to buy stocks, but then the
stock market crashed. The people had no way to pay
the money back.
During the Great Depression, over
half of the banks closed. But compared
to today, it is approximated that only
31 of 8 thousand banks have closed in
the past 3 years. This is a huge difference
since the 1930's.
Contrasting the Great Depression
and today's Current Situation
There are many differences
about the Great Depression
and the Current situation today.
During the Great Depression,
3 million children were forced to
quit school. Today, children are
not forced to quit school.
During the Great
Depression, the
circulation of money
was so low that in 1932
and in 1933, the US mints
did not even mint nickels.
In today's situation, the US
mints have not stopped
the production of any
coins for a given amount
of time.
Many experts believe that the end of the
Great Depression was caused by the start of
World War 2. This was because the United
States needed to produced items needed by
the British. This produced many jobs for
the people. However, in today's current situation,
we are not entering a war. So that will not help
the US get out of it's current situation.
Comparing the Great Depression
to the Current Situation
There are many similar situations that
took place during the Great Depression
and also in today's Current Situation.
When Franklin D. Roosevelt created the
New Deal program, unemployment rates
dropped from 25% to 15%. In today's situation
President Bush and President Obama created
the $700 and $770 billion stimulus packages.
The president from the Great Depression, and
the presidents from the Current Situation created
things to help the US get through the rough times.
Franklin D. Roosevelt also created the program called
Social Security during the Great Depression. This
program is still used today, and it helps the US
with it's current situation.
Many of the programs
that were created during
the Great Depression, also
help us today. I believe that
is why we have not reached
another depression, because
we've learned from the
previous one.
The Great Depression compares and contrasts to our current situation in many different ways. The unemployment rates rose in both situations, the presidents of each time period created different programs to help the US get though the rough times, and there has been bank closures in both.
However, my personal opinion is that the United States is not heading towards another Great Depression. The unemployment rate is much lower than it was during the Great Depression, the stock market is much better, and we are not going though and awful drought like the people of the Great Depression went though.
Depression | Causes, Effects, Timelines." Causes
Of The Great Depression | The Great Depression |
Causes, Effects, Timelines. Web. 31 May 2012.
<http://www.thegreatdepressioncauses.com/>.
Web. 31 May 2012. <http://www.wtvy.com/>.
Answers. Yahoo! Web. 31 May 2012.
<http://answers.yahoo.com/question/index?>.
2012. <http://americanhistory.about.com/>.
The Free Dictionary. Farlex. Web. 31 May 2012.
<http://www.thefreedictionary.com/>.
(history.knoji.com)
(www.thefreedictionary.com)
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Here is a graph comparing the
unemployment rate during the Great
Depression, to the unemployment
rate now.
(www.wtvy.com)
During the 1930's, there was a severe drought
in the Mississippi Valley, also known as
"The Dust Bowl". Although this drought was
not a direct cause of the Great Depression, many
people had to sell their farms so they could pay
their debts and taxes. It also forced many of the people to move.
(americanhistory.about.com)