In October 1929, America’s stock market crashed
In October 1929, America’s stock market crashed, thus began the spiral of the economy in the country. The Great Depression refers to the time in history where America experienced the worst economic downturn, which lasted from 1929 to 1939 (History.com Editors, 2009). The following are causes of the Great Depression: First, the stock market crashed. This came after the historic expansion in the early 1920s. With the rise in stock prices, people took the opportunity to invest. In October 1929, the worst began to happen; stock prices rapidly declined, sending the stockholders into a frenzy. Secondly, banks started to panic in 1930-1932 as customers started withdrawing their money for fear that they would lose it. Banks had less money to lend due to the decrease in consumer investments (Duignan, n.d.). Thirdly, the country’s gold standard took a plunge.
The Great Depression shook the confidence of the American government, thus, affecting their politics. President Herbert Hoover recommended Laissez-faire economics to be applied, and it failed; hence he was outed. Franklin Roosevelt voted who proposed the application of Keynesian economics, which worked, and slowly the economy began improving.
The looming world was said to be what ended the Great Depression. During that time, over 12million Americans were deployed to war zones; this reduced unemployment, seemingly sustaining the citizens who had lost their jobs earlier due to the Great Depression.