The great Depression took place in America during the 1920s and its effects were unprecedented as it caused poverty and suffering upon the society.
Many believe that that the depression was caused by the U.S. stock-market crash that took place in 1929. Nonetheless, there is no consensus on its cause as other factors are also acceptable. The economic devastation of the 1920s led to the Great Depression and brought a tragedy for the whole society.
Causes of The Depression
Many causes have been put forward to explain the causes of the great Depression over which the economists have disagreed. However, one thing that cannot be disputed is that the Depression had major impacts upon the country and the lives of people.
Crash of stock market
The crash of the stock market in 1929 ushered in the Great Depression. The capital in America was represented by stocks.
There were easy-money policies that caused the stocks prices to go very high and this led to a big speculation that made people invest all their money in the stock market. Eventually, the price of the stocks went down sharply and people started selling their stocks in panic. The number of stocks available for sale was higher that the number of people willing to buy and eventually the market crashed (Great Depression, 2008).
Uneven distribution of prosperity
The 1920s saw the American economy rise but the prosperity was unevenly distributed and the farmers as well as the untrained laborers were largely excluded. It therefore led to the nation having a greater production capacity and could not match in consuming the products.
Moreover, the policies of the Republican administration in regards to war-debts and tariff had led to a decline in market for the American goods (Great Depression, 2008).
Effects of The Depression
The effects of the Great Depression were felt both at home and abroad. No one escaped its reeling effects. For example, countries in Europe were affected greatly as their economies were hit hard.
In Germany, the economic blow led to social dislocation that is alleged to have played a major role bringing Adolf Hitler to power (Great Depression, 2008).
When the Great Depression set in many people lost their jobs. The unemployment levels rose as many factories closed and up to about 16 million people had lost their jobs between 1932 and 1933 (Great Depression, 2008). The Great Depression compares to the economic recession that took place in 2007 in American and its effects felt on a global scale.
For instance, the following words by presidentObama show the similarities “Even though economists may say the recession officially ended last year, obviously for the millions of people who are still out of work… it’s still very real for them” (Hill, 2010).
Consequently, job losses and loss of money in the stock market the people fell into massive levels of poverty. The people did not have a source of income and suffered a great deal. The country’s economy suffered too” The gross national product declined from the 1929 figure of $103,828,000,000 to $55,760,000,000 in 1933” (Great Depression, 2008, par. 2). The suffering led economic hardships as well as physical, emotional, emotional and cognitive sufferings to the people because the Depression was a big tragedy hence they exhibited signs that people going through other crises exhibit (Barr, 2005).
The Great Depression led to untold suffering to millions of Americans as well as the devastation of the country’s economy.
The effects extended to other countries as well due to international trade just as it happened during the recent economic down turn. No country is in isolation and its activities affect other countries too even if they do not have a hand in causing the problems. It therefore follows that countries must take precautions to prevent an event like the Great Depression by learning its causes as well as its effects in order to minimize future damage or suffering in case of a similar tragedy.
Barr, J.G. (2005).
Predicting and Managing Crisis Behavior. Great Depression. (2008). Retrieved January 22, 2011 from EBSCOhost database.
Hill, P. (2010). Recession over a year, but recovery not felt. The Washington Times. P1, 1. Retrieved January 22, 2011, fromhttp://www.washingtontimes.com/news/2010/sep/20/recession-over-for-a-year-americans-dont-feel-it/?page=1