What could have been done to lessen the effects of the global Great Depression?

Answer 1

Many people thought that it would be a smart move to invest almost all of their money in the leading stocks. They were oblivious to the fact that during 1929, the prices of stocks were decreasing, and they were losing money. All the signs were there, but they decided to ignore those signs and continue investing. When the Stock Market crashed on October 29, almost everyone in the country lost large amounts of money. The wealthiest people soon became the poorest. The country was in chaos, and the banks panicked. So say you had saved your life savings in the local bank; you could almost be sure that after the crash, almost all of it would be gone. Had the banks not been allowed to gamble with your money, the Great Depression would have had much less of an impact on the citizens of the U.S. Thankfully, we learned our lesson, and afterward, the banks no longer had the right to spend your money.

Another way that the Great Depression could have been prevented was by having tighter rules on margin. Margin is borrowing money to buy securities. Let me throw out some numbers based on the current margin rules. You have a million dollars in your margin account. You can spend up to two million dollars on stock (the "initial margin" is 50 percent), and you must maintain an equity level of at least 25 percent. (Equity is the value of the stock minus what you owe the brokerage.) If your equity drops below the maintenance margin, you've got to put more money in your account. This is a "margin call."

In the 1920s, the initial margin was only 10 percent, and there wasn't a rule on maintenance margin; the brokerage house could set it to whatever they wanted. When the prices of stocks started to go into the toilet and brokerages had to dump investors' portfolios to cover the margin, the prices of those stocks fell further. (When people start selling stocks heavily, the price will go down to encourage people to buy the stock.)

Answer 2

The great depression was actually unavoidable. It started with a drought. With no water to survive on, all of the crops died off before they could be eaten. With no food, most oof the people died off until they started to grow potatoes, which could grow with very little water.

Answer 3

The only certain way to have completely avoided it would have been not to impose the massive war reparations payments in the Treaty of Versailles on Germany. These payments completely bankrupted Germany, triggering crippling inflation and a depression that gradually spread throughout Europe and then the world.

The US might have avoided it by tight regulations on investment brokerage loans (margin), banking, and support for farm prices. But this was a period of "free market laissez-fair capitalism", so government regulations of any kind were frowned on. However it is likely that had even such regulations been enacted, they would have only delayed the inevitable as the wave of global depression was rapidly strengthening.

Only one country totally avoided any effects of the Great Depression, the USSR, and they did so only because they had become isolated from the global economic system (many other countries were boycotting them and Stalin had decreed after the completion of the Dneper Dam project that they would bring in no more foreign engineers or equipment on other projects for fear they might cause Counter Revolutionary actions). However Stalin's totalitarian rule was creating an internal economic disaster far worse than any depression, with many millions starving due to his policies and millions more either executed or shipped off quietly to prison camps for opposing the Revolution (when most had done nothing more than been born in the wrong place at the wrong time).

Answer 4

No it could not. God has a plan that won't change and that was part of it. so we need to learn all we can about it and praise God for the great conditions we have today.

Answer 5

yes. if the roaring 20s hadnt happened the great depression wouldn't have happened

Answer 6

The nations could have worked together toward a collective solution.

Answer 7

-Tighter Rules On Margin